Tax Planning Tips for Small Businesses
Filing taxes is a daunting task for small business owners. They should, therefore, consider integrating tax planning into their normal business operations. In this excerpt, you will learn a few tax planning tips.
Hire a professional.
It is vital to seek tax accounting services when you decide to open your business. Below are the benefits of hiring a tax accountant.
- He or she will streamline your business operations to ensure tax savings. For instance, imports from certain countries are tax-free due to bilateral trade agreements.
- The accountant will help organise your financial books. He or she will tell you which records you need when preparing your taxes.
- Tax accountants file your annual taxes, reclaim taxes and interest on overpaid taxes.
- If you have a case with the Australian Tax Office, your tax accountant will represent you to ensure a positive outcome.
Separate personal and business expenses.
Some small business owners mix their personal and business expenses. The best way to counter this is by having separate business and personal accounts. Record every dollar you take from your business account. In such a way, it becomes easy to calculate how much money the firm has made and how much you owe the tax man.
Keep a paper trail of all business transactions.
Ask your staff to file all receipts and invoices. You should keep records of payroll tax, ownership records, bank statements, and profit and loss documents. These documents are vital during tax auditing. Cloud storage reduces the amount of paper in the office. It also ensures that records are easy to access.
Automate your accounting practices.
There is tax and accounting software available that can track and keep records of your business expenditure and income. This software helps prepare and calculate business taxes. Your accountant can help you shop and install a reliable tax software. The system must be secure as it stores crucial business data. Therefore, it should not be accessible to all your employees.
Be conversant with tax laws.
Taxation laws change each year. As such, you should regularly read publications that discuss tax laws. Some people file the wrong amount of taxes because they have inadequate knowledge regarding changing tax regulations. If you underpay your taxes, you could get in trouble with the Australian Tax Office. On the other hand, reclaiming taxes can be a lengthy process without the assistance of a tax accountant.
Tax planning tips for small business include hiring a tax accountant, separating personal and business accounts, keeping records of critical business transactions, automating accounting practices and being up to date with tax laws.
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