As far as business taxes in Utah are concerned, there’s good and bad news. The bad news is that it levies most of the standard taxes including corporate income and franchise. The good thing is that the state has one of the lowest and simplest taxes in the country.
Better yet, there are many ways to reduce your taxable income by claiming your deductions whenever you file your tax returns. Contact your accountants in Salt Lake City, Utah to know more about these deductions, which include the following:
The state allows you to reduce your taxable income with your charitable contributions, although this applies only to certain types of partnership. Nevertheless, if you have old things lying around such as work desks, you can donate them to a non-profit organization and claim a deduction equivalent to the non-depreciated value of the disposed asset.
You can also increase your overall cash flow by claiming deductions for your personal expenses. One of these is the interest you pay on your mortgage. You should know, however, that this applies only to your first two homes. If you’re attending school or sending someone to college, you can reduce your taxes up to $4,000 of school-related expenses excluding housing.
Opening a business can cost a lot of money. Fortunately, in Utah, you can claim capital expenses of up to $5,000 during the first year while you spread the remaining amount over the next 15 years.
Entertainment and Travel Expenses
You can declare a lot of travel and entertainment expenses including transport costs, accommodation, and meals as long as they are necessary for running a business. In other words, you cannot avoid but spend money on these items. To make sure you don’t abuse this deductible, the IRS puts a limit, such as allowing you to claim only 50 percent of your home-away meals.
As a business owner, it’s important you take advantage of all the possible deductions, but you should know it also isn’t right to overdo it, since an erroneous tax return carries a hefty penalty. To guarantee your information is correct, work with an accountant in Salt Lake City who is well versed in the taxation laws in the state.