Tax Tips for Small Business Owners

Friday, March 16, 2012

Tax Tips for Small Business Owners

Tax, for such a small word, it does cause a lot of headache for small business owners and the self-employed. When a company is in its infancy, getting tax calculations right can be an excellent boost for business. Here is the list of tax tips for small business owners.  

Record everything

This way there is no room to slip up. If every financial transaction made by the business is recorded then you can be certain that anything you present to the tax authorities will be accurate. The taxman can issue penalties against careless tax returns as well as those that are deliberately misleading.  

Keep Your Records Organized

While keeping records is relatively easier, filing them in a manner that makes sense is another matter. Keep electronic and hard copies wherever possible so you can double check anything that looks odd at a later date.  

Hire an Accountant

 Accountants know a lot about business tax and not only will they be able to process your tax returns, but they can also make sure you are paying the lowest amount applicable by law. A lot of small business owners can see accountancy services as a necessary evil but the fact remains that they can actually save businesses a lot more money than they cost.  

Keep Track of Your Tax

Deliberately keep aside more than you need for tax. As a guideline, keep 20-25% of your income aside; this will ensure you have a decent pot to dip into when it comes to tax pay. Bear in mind, if you overpay tax you will be entitled for a rebate. A simple spread-sheet should help you keep track of your percentage calculations.  

Be Aware of Your Deductions/Business Expenses

Though subject to limitations, tax deductible business expenses are worth knowing about in more detail. It may seem obvious but many small business owners miss out on deductibles they are entitled to. All of the following can be claimed for: Business use of mobile phone, business use of internet, business meals with clients and business mileage. If you feel you have a valid claim but are unsure ask the accountant; they will be able to advise you on what exactly constitutes an expense that has been incurred to produce income. Keeping on top of tax will alleviate a lot of stress for small business owners but also help them avoid any penalties from tax authorities.


Kevin Ball has written the post  on behalf of The Accountancy Partnership; providers of small business accounting and other accounting services .


Stew Serendra said...

Amid all your tips mate, the best I'd reckon is just to hire an accountant. I may have the best payroll software australia for one but if I don't know the limits of where my taxes should be, then it's all for naught.

form 2290 said...

I agree. Small business owners should have at least one accountant to organize every single cent in a company. This will lessen misconceptions. Furthermore, accountant has a vast knowledge on taxation which is one of the most common problems being encountered by a single business entity.

Kathy said...

These are great tips. Consulting tax accountants Perth could be the best thing you can do for your business.

Rajiv said...

There is no choice left for small business owners these days, because if they don't have an accountant, owners will find it difficult to maintain the records.

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