CLICK BELOW TO REDISCOVER HUMANITY
A DECADE+ OF STORYTELLING POWERED BY THE BEST WRITERS ON THE PLANET

How To Make Business Taxes Work For You

Besides the daily demands of operating a business, owners need to ensure they’re updated with their annual business tax payments. Failure to do so can lead to potential legal troubles that are too costly to fix.

There are various types of business-related tax payments that every organization must keep in mind. But at the same time, there are certain tax exemptions that can help ease taxpayers’ financial burden.

If you own a small business and are wondering how to make business taxes work to your advantage, check out these five tips.

  • Classify Your Business Type Properly

Not many people may realize this, but not being able to classify your business may eventually lead you to pay more taxes than you should.

There are different tax payment regulations applicable to each type of business. For instance, sole proprietors submit their business profits, including passive income and losses, on their personal tax returns. Corporations, on the other hand, need to file another type of report for their corporate taxes. This is on top of the personal income on profits that they’re liable for.

It’s highly recommended that owners seek the help of an accountant or lawyer to discuss the different business classifications and their tax implications. Failure to do so can jeopardize your business tax filing efforts.

  • Declare All Types Of Income 

Every business is required to declare all their income, whether deemed taxable or non-taxable. Hence, your tax form should reflect all types of income to avoid further scrutiny from the tax agency and to know how you may be able to find ways to reduce tax obligations. This is especially true if you’re able to sell a commercial property.

In such a case, an entity must file a capital gains tax (CGT), representing the difference between the property selling price and its accompanying expenses. Check out Commercial Loan’s article on how you may reduce your capital gains tax payment due.

  • Seek To Qualify For Business Tax Credits

Tax credits are more beneficial than tax deductions because they can be directly applied to the amount of taxes owed rather than a mere percentage reduction of a taxable income. For instance, if a business is qualified for a tax deduction of USD$2,000, and the entity is under the 25% tax bracket, the business saves USD$500. In comparison, a tax credit worth USD$2,000 is deducted from the business tax liability amount.

There are different ways in which governments can encourage specific business transactions to pursue socioeconomic objectives. For instance, tax incentives may be provided by the government for private companies that hire a specific minority group. In an attempt to develop sustainable practices, the government can also impose tax credits on businesses that utilize eco-friendly manufacturing practices.

Find out how your business will qualify for these programs or get in touch with the tax agency in your respective jurisdiction.  

  • Avail Of Tax Refunds 

Apart from the capital gains tax, there are other ways that your business may qualify for refunds from other business-related taxes. Sole proprietorships may avail of the following:

  • Personal and business expenses: If you’ve spent on a particular asset that can be used for both personal and business purposes, you can deduct a certain portion of the expense and declare it as a business cost.
  • Business use of your home and car: A small business that’s operating from home can avail of tax deductions from business expenses, too. These expenses may include repair, depreciation, insurance, mortgage interests, and utilities. The same can be said if you’re using your vehicle for business purposes.
  • Advertising and promotion costs: Any type of expense that’s meant to ramp up your digital presence is tax-deductible. These deductible costs may include the set-up fees for your website and web hosting subscriptions.
  • Schedule Your Transactions

If you’ve been planning to purchase a business asset or equipment, you may be qualified for a     considerable tax refund. However, rather than waiting for the next year, consider timing your purchases before the yearend. This could enable you to get a larger tax deduction.

As mentioned earlier, find out which business-related acquisitions qualify your business for tax refunds and do it before the year closes. Doing so will allow you to enjoy bigger tax savings.

  • Work With An Accountant 

Small businesses don’t often see the need to hire an accountant except when they file for annual business tax returns. Unfortunately, this isn’t an ideal practice. Without regular contacts and discussions with a tax expert, you may not be able to monitor your financial performance.

Ideally, an accountant should do more than help you file business taxes. They should be able to provide useful advice on tax credits and deductions, as well as monitor your spending and flag you in cases of problematic cash flow.

Final Thoughts   

Paying the appropriate amount of taxes not only saves your business from legal troubles. It can also provide your business with favorable credit and financial ratings. If your business is financially sound, you’re more likely to have access to the resources you need to further spur growth and expansion.

BIZCATALYST 360°
BIZCATALYST 360°https://www.bizcatalyst360.com/about/
WE ARE THE AWARD-WINNING PUBLISHING DIVISION OF 360° NATION —PRESENTING OUR LIFE, CULTURE, AND BIZ MULTIMEDIA DIGEST AS A HUB OF CREATIVE EXPRESSION AND PERSONAL GROWTH. WITH AN EMPHASIS ON ACTION, OUR VAST GLOBAL CONTRIBUTOR COMMUNITY EMPOWERS PEOPLE TO TRANSITION FROM KNOWING WHAT TO DO TO ACTUALLY DOING IT —ALL COMPLEMENTED BY SYNDICATION RELATIONSHIPS WITH A CHOICE GROUP OF EQUALLY INNOVATIVE MEDIA OUTLETS. TODAY AND EVERY DAY, WE SIMPLY DELIVER THE VERY BEST INSIGHTS, INTELLIGENCE, AND INSPIRATION AVAILABLE ANYWHERE —DOING IT OUR WAY BY PLACING OUR WRITERS AND OUR AUDIENCE AT THE FOREFRONT. IT'S MAGICAL. IT'S EVERGREEN. AND QUITE FRANKLY, IT'S JUST GOOD STUFF. PERIOD.

DO YOU HAVE THE "WRITE" STUFF? If you’re ready to share your wisdom of experience, we’re ready to share it with our massive global audience – by giving you the opportunity to become a published Contributor on our award-winning Site with (your own byline). And who knows? – it may be your first step in discovering your “hidden Hemmingway”. LEARN MORE HERE


TAKE STROLL INSIDE 360° NATION

TIME FOR A "JUST BE." MOMENT?

ENJOY OUR FREE EVENTS

BECAUSE WE'RE BETTER TOGETHER