For most small businesses, including sole proprietorships, household employers, and C corporations, business taxes for the 2022 tax year are due April 17, 2023. (For S corporations and partnerships, taxes are due March 15.) It’s more important than ever for every small business to do its due diligence at tax time. Small business owners already have a somewhat complex process for completing taxes, and recent changes to small business tax rules will add a little more effort.
According to The Guardian, a new tax rule in the American Rescue Plan Act of 2021 requires digital payment services such as PayPal, Venmo, and Cash App to report the amount of goods and services income business owners receive if it adds up to more than $600 for the year. Business owners who take lots of small payments should be extra careful to keep track of their income. When looking out for 1099-MISCs, keep an eye out for 1099-K’s from those payment services as well.
The real question: how can a small business save on taxes this year? NerdWallet shared these tips:
- Business meal deduction is up from 50% to 100%, as long as the food is from a restaurant.
- The mileage tax deduction is up from 56 cents per mile to 58.5 cents per mile.
- Be thorough with home office deductions. If you bought a piece of office equipment or technology a few years ago and began using it for your home office back in 2021 or sooner, you can deduct that!
Click here for more tax break tips from NerdWallet.
Tax Fact: National Tax Day generally falls on April 15th, which also happens to be the date for Emancipation Day, a legal holiday in D.C. With April 15th falling on a Saturday this year, the next business day the IRS can require taxes to be due is Monday, April 17th. Emancipation Day would typically affect the deadline for taxes if it fell on a Friday or weekend day, but it will be recognized on Monday, April 17th for 2023.
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