Whether it’s an individual, big business or small business, we’re all on a lookout for ways and means to cut down on one thing – taxes. We’re more than ready to implement or accept tips which help us to reduce the amount of taxes we pay! So we have come up with suggestions which will help small business owners to reduce the amount of taxes they pay:
Use a tax filing software:
Good tax software for a small business? What’s the need? But keep in mind, a good software will help you to file your returns and at the same time assure you of maximum refunds too. And there’s nothing easier and better than a tax software when it comes to managing the tax department of your business efficiently. Make sure you get a software that has good recommendations and reviews.
Maintain proper records:
Maintaining a detailed record of the receipts and expenses of your business is important. Make sure that you use cost segregation services so that you will be able to handle your records properly. All details when filing returns are drawn from existing records and having all the information in place will make your task easier. This will help you to not only calculate the appropriate amounts of tax but also to claim relevant deductions. This will automatically reduce your tax amounts.
Keep an eye on carrying over tax deductions:
Considering that it concerns with past years deduction amount, you may happen to skip these amounts. So keep an eye on all such carry-forward amounts- they will substantially reduce your taxable income in the current year.
Deduct all expenses related to your office:
Most of the business owners don’t categorize home-office expenses as their office expenses. This increases their taxable amount. So what you have to do is – all costs related to the portion of your home used for office purposes have to be considered as office expenses. You can even consider your car, for that matter. The percentage of fuel expenses used for office use is wholly and legally eligible for deduction from your income.
This is the best way to evade taxes. If you hire your family, the wages or salary amount paid to them will be shown as expenses in your books of accounts. The same thing will be considered as an expense when calculating the amount of taxable income. For works such as car maintenance, lawn mowing, attending the reception desk – make sure you use the existing members of your family. This way the income circulates in your home and you get your tax benefits too.