Small Business Tax Tips That Can Save You Money
Small business owners loan a lot of their revenues to the government through taxes, but being independent entrepreneurs, they are also able to take advantage of programs that can help them recover some of their revenues. As a small business owner, your life and your business are blended together, so that it can become unclear at times what expenses can be used for a tax write off. Here is a short primer on what types of expenses can be reported for your business, so that you are not forced to pay for any expenses that you are not required to.
Travel expenses. Keep track of how much you drive for business related projects. Even driving to and from the airport for business trips counts as travel expenses in the eyes of the government, so make sure you keep your eyes on the miles you log in order to report them for savings.
Keep track of your receipts. There is a tendency among many people, business owners and otherwise, to ignore small purchases. While a single dollar may seem like an insignificant amount, when you begin to multiply it over frequency and time, the dollar can add up to much more very quickly. For this same reason, it pays to keep track of your business expenditures and keep receipts, even for things that may seem minuscule. It can help to make bulk purchases of smaller items in order to keep the number of receipts down, try planning your resource consumption ahead of time when at all possible in order to make it easier to keep track of your purchases.
Know how much of your home you use for business. Many home based business owners fail to realize that the percentage of their home they use exclusively for their business can determine how much they are able to write off their taxes. Additionally, they are able to report the percentage of their utilities that they use for business, their internet connections and phone bills on business related lines. Depending on whether or not your family members are also involved in your business, you can deduct their medical coverage as a business expense as well as your own which is non-reimbursed. Your home is a potentially excellent source of reimbursements if you file your claims correctly.
Protect your incomes. When a company receives an exponential growth rate, the owner can be put into a higher tax bracket, meaning that a larger percentage of their revenues are taken away as tax. In order to avoid this, spending a percentage of income on business improvements which are then written off is a smart way to keep the money that you have earned working for your business. Be aware as well that going through an audit becomes increasingly likely the more incomes you are producing, so keeping your paperwork in order is an essential part of all tax processes.
Photo Credit to Chris Potter on Flickr