For every small business owner, tax planning may seem like something that can wait but, in reality, it can mean the difference between just surviving and thriving. As a small business owner, you know how important tax planning can be. Some simple strategies and the help of your professional tax planner will help keep you on track.
- You must have some sort of computerized system for keeping track of all of your expenditures as well as your sales and cash flow. This must be attended to every day so you will not fall behind. Keep every receipt you generate through your business. You never know what your tax planning professional and accountant will be able to find for you in the way of deductions. Ensure that all of your receipts are properly logged in and can be easily retrieved.
- A couple of major deductions you can likely take is your vehicle and purchases related to the cost of doing business. One of your major costs will be your investment in office supplies and equipment. You may be able to deduct the cost, or take a depreciation on it over several years, so record everything and log it in to your accounting system. In addition, your vehicle may be a deduction waiting to happen. If you are using you vehicle for business, you may be able to deduct a certain amount of mileage and other use. Keep track of your mileage and destinations. This will help your tax planning advisor when creating a strategy for such possible deductions.
- Tax credits can be a lifesaver for any small business. Look into them and take advantage of as many as you can. In addition, if you have taken out a recent business loan, the interest may be deductible at year’s end.
In the end, the most effective strategy you can employ is to team up with a professional tax planner and tax accountant. Do not look at it as just another business cost but, rather, look at it as an investment in your company’s future.