Are you running your own business? If yes, then you will want to pay the correct however, the minimum amount of tax. In case your corporate income tax return seems to be incorrect, then you may have to pay penalty for it. It has been said by Benjamin Franklin that “tax is one of the perpet
ual certainties of life.” Everyone is totally unaffected by tax. You will have to pay income tax based on your earnings and VAT on what you purchase. The tax code will enable you to deduct the costs of doing business from gross income and net business profit.
Read on to know 5 tips how you will be able to save on your tax.
- Make investment before hand – You may take advantage of Section 179 that enable a business to subtract expenditures for various purchases like computers, business software’s, vehicles, furniture’s or manufacturing equipment’s. If the company purchases anything before the year comes to an end, then they may subtract most of their expenditures for capital equipment. If the company does not require buying new things, then they may evaluate their record and use them at the end of the year for changing outdated assets.
- Postpone your earnings – If any company wants to remain in the lower tax bracket, then it is a good decision to postpone earnings. If you make your bill payments lately say in December, then the company may think of impeding the bonus till the New Year. If the company can work on accounting basis, then they may assert a subtraction for the bonuses even if they are not paid till the next year. However, you need to know that the bonuses must be rewarded within 2.5 months of year end.
- Car and travel expenditures – There are several deductions from car and travel expenditures. You may subtract 48.5% each mile for business tour and the charges that you have to pay during the journey. The other expenditures that are associated with your business trip include airfares, hotels and cab charges. In addition to this, you may subtract the expenses of your business colleague who is travelling with you. However, you must make it a point to keep all the receipts properly.
- Educational deduction – If you are taking some education related to your job, and possibly have already applied to a kind of Personal Money Service for getting loans online to cover the costs, be aware that the educational costs may be deducted if the course helps you to improve your job skills. In case the course is related to your work, the company may subtract the educational expenditures of the employee. Besides this, the transportation costs as well as the time you will spend for attending the classes may also get deducted from your salary.
- Maintain business records properly – You should maintain your business records in an organized way. Keep the important business documents at the right place so that you can save time particularly when the tax session arrives. Make sure you keep the copies of your income tax returns for at least three years.
Apart from these, if you are in search of a tax consultant, then make sure you appoint one who will provide high quality service and offer advice in all fields of corporate tax.