All businessmen have their own expenses which they need to face. One of these expenses is taxes which is implemented by law to every business companies whether big or small. Nonetheless, money allotted for taxes are surely a pain for most businessmen. If you are running a small business, here are some tips you can follow in order to manage your tax and be able to save.
1. Home-based office
Having a home-based business does not necessarily need any tax declaration. You can sell or work using the internet by the comfort of your home. If in case a tax is still implemented, taxes would be at its minimal cost.
2. Incorporate business
If you have a sole proprietorship business, why not try converting it to an incorporate business. There are some advantages and benefits like lesser personal liabilities and less tax expenses which you can obtain in an incorporated business.
3. Donate to charities
When you donate to charities, you are able to lessen your tax. But you should always remember to keep receipt of your donations since this will be your proof of donation.
4. Keep records
It is essential to keep track of the records of your daily expenses and profits. By having your own record, you are able to determine any tax deductible expenses.
5. Purchase small assets
Purchasing assets that costs less allows you to have advantage in the delay until you are able to obtain a 100 percent write off which help reduce your tax bills.
6. Business vehicles
Having a car for small company or business can cause depreciation. That is why it is much better to have your own car in order to avoid the additional one-off depreciation deduction of $5,000 as well as avoid large tax charges to your business.
7. Know your profit and loss
Know the profits you earned this year as well as the loss you had. If you are able to get a good amount of profit, consider on buying some assets. By reducing your profits, you are able to lessen or lower your taxable income.
8. Employee payrolls
Keep all payrolls after paying your employees, and then submit this at the end of the year in order to avoid employee taxes.
9. Pension scheme
You can lessen your business expenses as well as obtain a no immediate tax expenses by contributing individual retirement funds that will maintain allowances. However, you should be careful about the impact of pension anti-forestalling law.
10. Plan ahead
Always consider tax a year-round term. That is why it is important to ask your accountant to file tax returns in advance in order for you to have enough time to send your text payments before its due time. This is essential to avoid any penalty, charge, or interest when you are not able to pay before it’s due.
Every country has its own tax set on corporate incomes according to OECD Library. And since your tax is the major expense you need to pay from time to time, it is crucial to know different ways on tax saving tips.