Taxes are stressful for most of the people and it’s a fact that no one wants to pay more tax than the necessary amount. Filing taxes for the first time as a business owner can be tiring and stressful. Payable taxes regarding a business is much more than it is for an individual and it makes it even more stressful. Even when you have all the records, sometimes it becomes difficult to save on it. But still there are some tips and tricks to find deductions and to save. For businesses there are many types of taxes payable at different places still there are many advantages to being self-employed when it comes to taxes. Being a small business owner — every penny counts and that too when living on thin margins and fighting for the profits. The taxable amount for a business is higher than that for an individual and paying in full can leave a dent in the wallet. What a new business owner might not realize is that there are multiple ways to save taxes which they did not had any idea about.
7 Tax Saving Hacks for Small Business Owners
Get a Certified Public Accountant (CPA)
If you are a business owner, and want to save on your taxes one of the first thing you need to do is get a Certified Public Accountant (CPA) for your business. A CPA’s work is to keep all your accounts up-to-date and ready and filing all the taxes according to the rules and regulations before the deadlines. This is advised to do as a CPA is a professional person and knows much more than us. He can guide you legally to sae on your taxes in a better way. You can Interview a few and select one who can meet your business needs. Once he is haired provide him all data required correctly.
Use a Tax Software that will find Deductions for You
Using a tax calculator software can reduce the headache of small business owners who use to struggle when it comes to calculate and pay the taxes. A tax calculator software provides you accuracy and no segment can be left in it. In short it calculate your taxes easily in minutes for which you would have struggled for days. So it is always better to use a tax calculator software. It makes your tax hurdle easier.
Collect Your Receipts
Being a business owner it’s very important to take care of all the business receipts. While running the business the business you would have paid at many places for different goods and services, some while purchasing, some while making payments. Keep all the receipts with you and don’t even miss one. This can help you a lot with your taxes as some of your expenses are taxable while some are not. So, if you have the receipts you can avail tax exemptions on some of your expenses. Scan your receipts with the tax filing software it will make your work easy.
Deduct Your Home Office
Many of the small business owners operate their business offices at their home, but only few of them know that they can get exemption on taxes through their home office. There can be deduction which include insurance, mortgage interest payments, repairs and utilities like internet service too.
This deduction is even possible when you get a small office on rent in a residential area or this can be done by taking a home on rent and starting your business from there. This part is profitable for both the owner as well as the tenants.
Pay attention to Your Adjusted Gross Income
Numerous small venture tax reductions are gotten from your balanced gross pay. Ensuring you keep careful and updated records is essential for computing AGI toward the end of the year. This can make a vast difference on your taxable amount.
Keep an Eye out for Carryovers
There are some tax deductions or credits which may not be fully used in one financial year, some of them are eligible to be carried over to the next financial year. These deduction can include items like-
- Capital losses
- Net operating losses
- Home office deductions
- Charitable contribution deductions.
Keep these deductions in mind while filing your taxes. Use software tax calculators to have accuracy.
Change your Business Structure
Leading taxes are the major problem which small-business owners are facing, this is a clear-cut truths. Thought-provoking advice, and underutilized solutions to save you time, money, and heartache are available but all these things are not enough. But changing your business structure is the one of the thing which can help you with taxes.
Your business entity can be the most profitable player on your group. It’s basic to pick the entity which is best for your business, roll out improvements when important, and exploit the advantages of your business structure. Change your business structure according to your earning and expenditures. In some of the scenario, the owner’s salary is the only amount that is subjected to tax. Otherwise, the self-employment tax is applied to net earnings, which can make your taxable amount much higher.