Business Tax Management Tips From The Pros

March 16, 2021

All business can be interpreted through profit and loss, and one of the main losses of any business is – taxes. Taxes are a necessity in any modern society as they fund public welfare and the state’s machinery. Many would argue that taxes are often unjustly distributed and too complex to get a hang of it, something that is often true but is beside the point of this text.

Any business owner will want to maximize their profits while remaining within the boundaries of the law. The first and foremost way of doing this is by minimizing your taxes, something that is manageable but very difficult if you are not versed in the matter. Luckily for us, experienced entrepreneurs have gone over this process many times over and have devised several ways to decrease their taxes while still not having to cut corners by lowering workers’ pays or registering off-shore companies.

business tax management tips

 

Separate Personal from Business Expenses

We are reminded ever so often not to mix business and personal. Well, this holds in terms of expenses too. While it may seem easy to just use everything you have at your disposal for your in-home office or handicraft production, it is better if you know exactly what is for what and how much you use it.

We can name several tips to make this easier:

  • Open a separate bank account or business credit card
  • Buy separate business items
  • Write down how much is an asset used for business and personal reasons

All of this is needed because anything used directly for business can be interpreted as a business expense and, therefore, can be a deductible business expense. If, for example, you use your car to deliver products to customers, but you also use that car to drive around or go to the store, you can calculate how much time the vehicle is in use for business and have a deductible for that fraction of its taxes.

 

Keep Track of Your Bookkeeping

Another dull yet much-needed practice is bookkeeping. All the possible in’s and out’s of your business should be written down there and should offer you an accessible and easy way of managing your business taxes and of course, in this digital era, we no longer need to write anything down on paper but have apps that can store and calculate the numbers for us.

This job used to be reserved for specially educated accountants, but with the rise of small businesses (that are often composed of only one or few people) the job has shifted to the owner. And as many of us have no proper education in accounting – apps developed for this can be a real life-saver. With proper bookkeeping, you can plan your companies move in advance much more carefully as you have the statistics to guide you in what actions require more or fewer taxes to be paid.

 

Deduct As Much As Possible

Different countries have different laws concerning this matter, but either way, most of them state that you may lower your (personal or business) tax liability by lowering your taxable income. This practice is known as a tax deduction and should be used wherever possible.

A deduction can be almost any expense that the taxpayer made during the fiscal year that can be subtracted from their gross income. The government may change the regulations from year to year, to how much a certain type of expense is deductible, and that is something you should keep an eye on if you already don’t have an accountant to do that for you.

A good example is travel expenses as any travel that is considerably longer than your normal working commute is classified as business travel and most expenses related to that can be deducted. Gas, lodging, and extra allowance for workers are all almost always deductible, but for example, gifts to bring back to your spouse from the trip are not as they are not a business-related expense. There are a plethora of other deductibles too, that can significantly lower your taxes if you apply for them. New machinery, medical expenses, business meetings in restaurants, etc.

business tax management

 

Tax management is a skill that is seldom taught in business schools but is greatly needed in real life. Most new business owners will be faced with the challenge of finding out how to do it themselves, and considering how tight the starting budget for most companies can be – it is a lesson worth learning in advance. So don’t shy away from asking those more experienced for help, as we are all doing business in good spirit and can only benefit from a more profitable working environment.

0 Comments

Submit a Comment

Your email address will not be published.

Is Your Business Being Found Online?

Laptop Metrics Colorado

Free Digital Marketing Report ($150 Value)

marketing module lineWant to know how your business stacks up against the competition?

Read more articles about Uncategorized.

Digitally Transforming Your Business Communications to Support Marketing and Growth

Digital transformation is reshaping the way we do business in many different ways. From the way we generate leads and approach the art and science of sales, to the way we communicate internally and externally, there is no denying that digital technologies beg the need...

Internet Marketing: What Is It & How It Can Build Your Brand

  The official birth date of the internet is widely considered to be January 1, 1983. Since then, we have grown accustomed to the web and its capabilities, spending more and more time in front of our computer screens. According to DataReportal’s Digital 2022...

Facebook Competitors: Do They Have a Chance?

It’s a death by a thousand cuts that Facebook faces, both now and in the future of social media experiences. That’s not to say that Facebook (now termed, Meta) is going to go away, just that it’s no longer the big bully on the block. There are scores of social media...

What Is Trust Flow SEO?

First, let’s see what trust flow means for websites – Trust flow is a measure of the quality and trustworthiness of a website, based on the number and quality of inbound links to the site.     A high trust flow indicates that the site is trusted by many...

What Do “Business Development Skills” Mean In a Resume?

Every business needs development, and we can see the development of a business in its marketing.     Marketing is not just about selling or advertising, it's about developing your business by creating relationships with your customers. It's about...

How Much Cornerstone Content Should You Have?

Cornerstone content is the foundation of your website or blog. It's the most important and comprehensive material that you have to offer, and it's what you build everything else around - including your social media strategy.     Cornerstone content is...

5 Things to Consider Before Buying Stocks

  Building a successful business is one of the best ways to achieve financial freedom. Nonetheless, this does not mean that you should stop exploring other opportunities to boost your income. The options abound, and one that you might want to consider is...

15 Websites with Free Stock Images for Commercial Use

Photography is an essential part of any design and finding the right commercial-use photos for free can be a challenge. Sure, you could find the standard stock photos of a person sitting in front of a computer or business professionals smiling in a conference room,...

Read more articles about business.

5 Things to Consider Before Buying Stocks

5 Things to Consider Before Buying Stocks

  Building a successful business is one of the best ways to achieve financial freedom. Nonetheless, this does not mean that you should stop exploring other opportunities to boost your income. The options abound, and one that you might want to consider is...

15 Websites with Free Stock Images for Commercial Use

15 Websites with Free Stock Images for Commercial Use

Photography is an essential part of any design and finding the right commercial-use photos for free can be a challenge. Sure, you could find the standard stock photos of a person sitting in front of a computer or business professionals smiling in a conference room,...

How TikTok Is Changing The Way Businesses Advertise

How TikTok Is Changing The Way Businesses Advertise

  From old-fashioned word-of-mouth advertising, social networks have improved how businesses publicize their brands. There is a new world of digital marketing on Instagram, Facebook, YouTube, TikTok, etc. According to research, TikTok records over I 000,000,000+...

Understanding of Linux device driver development

Understanding of Linux device driver development

The creation of Linux device drivers is a highly demanded service provided by numerous IT companies. What is Linux? What are the functions of drivers in Linux-based solutions? How to develop these drivers? Find the answers in our article.     About Linux...

Share This