There are many exciting things about being a business owner, but paying tax is not one of them. All companies have tax commitments, and ensuring you handle them efficiently is of paramount importance. With that in mind, read on to discover some helpful tax tips that all businesses today can benefit from.
Get your structure in place correctly
How you set up your company has a significant influence on the quantity of tax you pay.
Many companies, particularly those with an abundance of $20K profits, would pay smaller tax if they changed to a limited business. A structure with both an unincorporated firm and a limited corporation can be extremely tax-efficient, especially if you expect profitability and growth in the years ahead.
Make sure you have goods recording software in place
One of the difficult things when it comes to tax for small businesses is keeping efficient records.
This is especially the case if you do not have someone in-house who will be able to handle all of this for you. However, the good news is that there is a lot of software on the market today that has been designed to make your life easier. This will make it easy for you to input all of your financial data so that record keeping becomes a lot easier.
Even if you do decide to hire an accountant, you are going to need to submit this information, so it does make sense to invest in software that is going to help your business to thrive.
Make the most of fixed fee accounting services
Many company owners are put off from using a chartered accountant, as they view it as an unnecessary cost. Nevertheless, an accountant could save you masses of capital, and so you will quickly make back what you have spent.
Your bookkeeper will make certain that all your books are in order and that you are meeting your tax responsibilities. They will likewise guarantee you are obtaining the most of the tax breaks available to you and that your funds are going far.
You can get accountants that are specialists in your industry, too, such as a petroleum accountant. Furthermore, by going for fixed fee accounting services, especially, you can adequately manage your costs, as you will know exactly how much you will be paying for the accountant’s services.
Take some time to familiarize yourself with the rules and regulations
This is something that every small business owner should do, irrespective of whether you are going to be handling the tax returns yourself or not.
It is still important to know what is required of you so that you are not completely left in the dark when it comes to your business’ requirements. At the very least, this will keep your accountant honest and ensure that no one is going to be able to pull the wool over your eyes.
Avoid tax fines
There is nothing more irritating than being struck with a fine just because you have not presented your accounts on time. If you do not register your tax account by the deadline, there is a fine.
If you are over three months overdue, you will experience a penalty by day.
If you are six months late, you will undergo a fine of five percent of the tax you owe. As you can see, damages can quickly mount up, and there is no justification for not arranging your statements on time, so don’t hurt your company by being late.
Subtract office accessories and furniture
You have to subtract everything you purchase for office purposes, and you need a statement in your firm’s name for administration purposes. This covers the likes of printers, machines, paper, office fittings, accessories, and fixtures.
Make sure you are always honest
While it may be tempting to cheat the system so that you can reduce your tax liability, this is not something that you are ever advised to do.
If you do so, you could end up getting caught, and you would have considerable fines to face.
Even if you claim that it was an honest mistake, you could find yourself with consequences, especially if the governmental body is not quite sure that you are being truthful. It is never worth taking the risk when it comes to the financial security of your business.
Make sure you find out about any tax breaks you could be entitled to
There are plenty of ways that you can reduce your tax liability, and legally so.
However, a lot of people are not aware of this, and so there are many people across the country that are paying too much tax. This is why an accountant is so important, as they will be able to make sure that you are not overspending when it comes to your tax liabilities.
You may also be able to request a refund if you feel that you have overpaid in the past, so it is worth looking into this as well.
The value of this cannot be emphasized enough.
Nonetheless, a deficiency of organization is still one of the principal reasons why numerous small enterprise owners end up repaying larger tax than required.
You must assure you have transparent and organized copies of all your accounts. If you do not maintain proper supporting documents, you could find that expense requests are denied.
Subtract taxes relating to trips and events
Whether you are hosting a training experience, attending a customer gathering, or making a journey to purchase some supplies for your corporation, you will subtract all expenses connected with this when it comes to satisfying your tax records.
This includes mileage from utilizing your transportation, public transportation tickets, airline fees, parking, tolls, congestion costs, hotel visits, refreshments, and maintenance expenses, for example, lunch while on the move.
Please be careful that you only put the likes of hotels through the records if you have had to stay away from home.