Around the world, businesses are the ever-present lifeline of small and big economies. However, even success comes with long hours and significant investment in money and energy.
Every small business owner wants to save some funds on software, for example, or at the bare minimum utilize their finances efficiently for better profit margins. One of the best ways to save money and meet your obligations is by paying more attention to your taxes. With a few simple, and most importantly legal, tax hacks you can enhance your small business in more ways than one. Here are a few.
1. Make the most of tax filing tools
It’s never easy to file taxes being a small business owner who already has so many things to worry about. However, using tax filing software should considerably lessen your experience with the not so friendly proverbial of ‘death and taxes’. It certainly helps with avoiding errors and severe headaches. The best entrepreneurs, accountants, and mathematicians are often frequent tax software users, so it should be a consideration you take seriously.
Tax filing tools accord small business owners plenty of safeguards they probably cannot afford otherwise. Use these platforms to file tax returns on the web accurately and enjoy full refunds whenever they apply.
2. Mind the morrow
Small business owner can’t take long-term goals lightly. But preparing for tomorrow does help. For instance, you should already have set your retirement goals by now, and if you haven’t – now is the time. In fact, by investing more funds into your retirement today you could end up with handsome tax benefits. Check out IRA tax hacks and harness your taxes with retirement savings.
Don’t stop there. Understanding accounting, taxes and other related financial obligations for your business pays off in the long-run. Think about a CPA course for yourself or a staff member that will allow you to organize your finances and plan your future financial trajectory while meeting relevant tax obligations. CPA exam costs vary between $1,000 and $3,000 with diverse features such as video lectures, pass guarantees, personalized support and audio courses, among others.
3. Don’t throw away financial footprint
Obvious financial footprints some ignore are receipts. Don’t throw them away yet. Lots of receipts for all manner of services and goods are deductible from taxes and can balance your taxable income effortlessly. Depending on your small business structure, you’ll find lots of deductibles you can take advantage of. If keeping paper receipts for months or a whole year is cumbersome, start digital storage for them. Use any of the different apps out there to keep your paper trail digitized by capturing the receipts, storing and organizing them in one unique place.
4. Home office deductions
Do you operate your small business from home? Do you know it’s possible to deduct expenses from it? Yes, you can deduct certain things such as repairs, mortgage interest, internet services and other utilities. To hack this, ascertain the part of your home you’ve dedicated to running your small business operations. Tax software can help calculate the amount while the deduction is open for renters and property owners alike.
5. Keep an eye on tax calendar
You should never miss a tax deadline or wait until it’s too late to comply with tax laws. However, you could be really busy and hardly remember to keep up with everything. With deadlines always on the horizon, you can rely on free tools provided by the IRS to avoid missing critical tax deadlines. Check out the IRS calendar for businesses and self-employed individuals and you won’t miss any tax payment.
6. Mind your business equipment
If your small business continuously purchases equipment all the time you can make something out of it. Familiarize yourself with Section 179 and Form 4562 to ensure your equipment bought in 12 months is an expense for your budding business. In the long-term, this will be invaluable and will bring much-needed cash savings.
Old equipment? Don’t sell it yet. Incurring an ordinary loss (by abandoning it) might be a better option because it’s fully deductible. Study Section 1231 and ascertain how your old equipment will be classified to make some tax saving from it.