Inspired Accounting

A Section 179 deduction allows businesses to deduct the entire cost of an asset in the year it was purchased.

This deduction treats certain assets like business expenses in that it deducts the entire cost all at once instead over the life of the asset.

Naturally, there are some limitations.

A business cannot expense more than its taxable income in a year.

Only certain assets qualify. Those qualified assets include: computers, office furniture, and some equipment purchased for business use.

At least 50% of the lifetime usage of items must be strictly business use to apply the Section 179 deduction.

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Asset depreciation spreads the cost of large assets out over many years by allowing a business owner to get back some of the cost through a deduction each year.

There are two kinds of depreciation:

Straight-line, which is applied to assets like buildings. With this method of depreciation, the cost is spread out evenly over the life span of the building (or other large asset).

Accelerated, which is applied to assets with much shorter life spans, such as computers or vehicles. Using this method of deduction, the cost of the asset is deducted more in the early years of use.

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Automation is one of the many ways to make tax prep a little easier for yourself.

You can use apps, websites, or other services to keep detailed records in a single place.

There are TONS of options for this with subscriptions to fit every budget.

QuickBooks is a wonderful all encompassing accounting tool. It offers many features to assist with bookkeeping, expense reports, and more all in one place. You can even scan receipts direct to the app!

Expensify is a great option for tracking travel expenses. You can scan receipts or link your business cards so it can track expenses straight from the account!

If monthly subscriptions aren't your thing, there are some less hands-off options that don't add another expense.

Use Google Sheets to track expenses and other relevant tax information. To keep receipts you can use the camera on your phone or the receipt function on Evernote.

Saving isn't just a good idea for individuals.

Businesses can benefit from savings in many of the same ways individuals can.

There are the obvious benefits, like having extra money for emergencies, such as repairs, and other miscellaneous expenses.

Then there are the things you may not have thought of like, paying taxes, should you end up owing.

On the business specific end, savings could be used to give your employees bonuses.

The list of benefits for a business savings account could truly go on and on. If you are able, consider a separate savings account!