In small business, every penny counts. Giving off a big slice of your income to taxes is really an aching point. Minimizing taxes will hugely impact scaling your business revenue. Because it is not how much you earn, it is always how much you save at the end of the day. You don’t have to spend all your income on taxes. Thankfully, there are some strategies that are worth taking chances on to tame your tax stress.
This blog post will go over some quick tips to minimize your small business taxes.
Deduct your work from home
This era locked all of us at home, moving our offices to home. You will be spending a considerable sum of money on your work from home. Home office deductions are often scary and the road not taken by most of the small businesses. But provided the qualifying records, you are legally open to apply for home office tax deductions. There are some regulations clung to your tax rules. If your home office fits into the lines of your tax authority, you can apply for a write off with valid and credible records.
Complete tasks before deadlines
Always keep in mind that even if you have the best accountant in the country, it is the responsibility of the business owner to have a handle on the deadlines. Always ensure to submit your annual accounts, tax returns and relative paperwork on time to avoid penalties. Even when you have strategies to minimize taxes, not submitting your papers on time will cost you more than your estimate and pull in unexpected expenses.
Have an eye on carryover tax deductions
Tax deductions are not always ‘use it or lose it’. You might be eligible for a certain tax deduction this year, but you cannot take full advantage of the tax break. This might have happened due to different reasons. But the question is if you can carry forward your unused tax deductions and credits of a year to the following years.
The straight forward answer is yes! But there are of course rules for how and when to do so. You can consult with your accountant or a tax advisor to tap more into maximizing tax deductions by carrying over. This is one of the important things that usually slip through the cracks during tax seasons.
It is also significant to remember the tax deductions of the previous year, choices that you made with that and the strategies you had cultivated the previous year. Though you might know about the carryover, you might miss out on it in the hustle and bustle of the tax season. This frequently happens when you hand over things to a tax preparer.
Reclaim business utility expenses
If you are a small business owner and you are using phones and vehicles for your business, you can pull them into account for tax deductions. Or if you provide your employees with phones and vehicles for business purposes, you can involve them in your accounts for tax deductions.
For instance, if you had to ride a long way to meet your client, you can track your mileage. You can include the fuel cost for the miles you rode for your business. Or if your cafe has an in-house delivery service, you will have a couple of guys to do the delivery and you will be providing them with a vehicle and fuel for the delivery. You can show these allowances to claim tax deductions. Or if you have a driver for your car that you use for your business, you can show his salary details for tax deductions.
Write off business-related expenses
As a business owner, you will be moving from place to place for business affairs. So, every time you go on a business trip, do not spend the expenses involving your hotel, travel and food from your personal account. You can file them up in your business account. Your taxes will be deducted for all the business steps. The same applies to your employees. If you are sending your employees out for a business-related trip, you need to cover their expenses. In such cases, they can file their expenses in the company’s account so that you will get tax deductions. Also, you can show accounts of your office set up costs for tax deductions.
Maintain Accurate Records
It is mandatory to keep track of the financial flow of your business in a timely manner. Do not let a single penny slide through the cracks. Have proper records of every penny spent and structure them in an organized way. By having proper and transparent records, the tax returns part runs smooth and hassle-free.
We now have tons of applications on the web for automated bookkeeping. QuickBooks is the widely used accounting software adored by millions of small business owners and their accountants for accounting chores. Maintaining precise records will positively affect your tax deductions. Syncing your small business transactions with QuickBooks from payment gateways such as PayPal, Stripe, Square can be done with PayTraQer, the #1 most trusted QuickBooks automation app for small business owners. Businesses can take advantage of bookkeeping applications like PayTraQer for their QuickBooks-keeping. These applications can do most of the heavy lifting and even have special settings for tax customizations. They come with a 30-day free trial each. Try exploring PayTraQer for QuickBooks and have fresh, clean and decluttered books all the time to maximize tax deductions.
Final Words
Having said everything, as a small business owner, it might be a bit difficult to keep tabs on your bookkeeping, accounts and tax filing. Apart from the aforementioned hacks, there are many doors to maximize tax deductions. Accountants are trustworthy advisors in light of tax filing. You can seek an accountant or a tax preparer to avoid hiccups in the tax seasons. It is always suggestive to ask advice from your accountant to keep things straight and plain sailing.
