Tax Seasons and Business Certainty: 3 Ways to Save On Taxes
Life is merely composed of fleeting moments, but two things remain constant—death and taxes. In the business world, however, only one should be regarded with certainty: taxes. Running a business entails supplier and client meetings, marketing efforts, and employee engagement, but tax obligations are a non-negotiable part of your operations. As a business owner, you are entirely responsible for which type of taxes your business needs to pay, how much, and when to pay.
Making a mistake can make your tax bills grow, multiplied by penalties and other repercussions. If you plan before the dreaded tax season, however, you do more than just get your taxes right—you enjoy available deductions, ultimately saving on the amount of tax your business needs to pay.
Knowing how to legally minimise your tax liability means you get to enjoy more money you earn, but any wrong move can lead you to trouble. To ensure that you only make the right tax decisions, here is a quick guide for you:
1 - Identify which tax deductions are legal
Most small business owners remain off the deductions they are entitled to, which causes them to miss out on money that can be saved annually. However, these deductions must be done properly, meaning that everything filed should be fair under the law. Here are some of the businesses expenses businesses are entitled to deduct from their taxes:
Mobile phone bills, only if the lines are solely used for business purposes
Gas expenses and mileage for personal vehicles used for business
Costs of businesses operating from home, such as rent and utilities
Costs of purchasing business equipment, such as desktop computers, phones, and printers
50% of entertainment and meal expenses done with employees, clients, and business partners
2 - Make sure purchases and investments are done timely
A growing business eventually requires the investment of new services or equipment for expansion, but timing matters. Your purchases can affect your tax liability for the rest of the year and the next, meaning that you should carefully consider your investments before the end of the year.
If you’re planning to invest in a moving truck, for instance, it may be best to make the purchase before the year ends. This way, you enjoy the tax deduction in the current year. Bear in mind that equipment value decreases as time passes, so it’s best to get your deduction in full price rather than a decreased value. This also applies to other investments, such as marketing campaigns, renovation projects, and so on.
3 - Structure your business plans accordingly
Tax planning goes beyond just crunching numbers—it also entails looking at the entirety of your business, including the structures. Most startup businesses starting small fail to change their structures as growth happens, eventually leading to problems. If you began a business as a sole proprietorship company, for instance, and you’ve gathered business partners along the way, it may be best to revise your business plan.
While the prospect of changing may not always be necessary, bear in mind that there are always certain tax advantages to be gained by structuring your business differently. If you’re unsure about these strategies, however, it’s best to always consult with tax professionals.
Working With Gold Coast Accountants
The tax season may be an overwhelming experience, but taxes are inevitable. Thankfully, there are ways to ensure that your business continuously grows, especially since tax deductions are possible. So long as you plan carefully and invest properly, you’ll be able to enjoy hard-earned money your way—all without the dreaded touch of taxes.
For the best possible results, work with the best accountants in the Gold Coast. New Wave offers you end-to-end accounting and bookkeeping services, all designed to help you scale and grow your business. With over 600+ clients across industries, we know the importance of tailoring solutions accordingly. Let’s talk about taxes and financial growth—reach out to us today.