Starting a business of your own can give you a lot of independence at one end but also a much of a headache when it comes to managing expenses. Money flows out quicker than it fills in your pocket and initial years for your business can be a bit intimidating to get through especially if along with your tight income, you are unaware of the applicable taxes. However, there is a bright side to this. Governments and policymakers have exemptions from taxes that are applicable under specific circumstances and individuals as well. Small business owners qualify for some too (hooray!).
What these tax exemptions or reliefs do is provide a reduction in the taxable income or the payable tax that allows business owners to worry (a little less) about the costs coming their way. Here are some ways you can take advantage of tax reliefs:
Be Aware of Tax Laws
Tax laws tend to change and can increase or decrease your anticipated tax costs. To ensure you are prepared in every way, stay up to date with the news and the changes in tax laws along with any amendments to stay at the top of your cost game. Make sure you hire a tax accountant wollongong in order to save yourself from unwanted situation.
Home Office Deductions
If you work from home and have a designated space in your house for your work, then you can qualify for home office deductions. These deductions reduce the taxes payable on your house and help you save thousands on annual basis. Ensuring there is a space ONLY for your business activities can up your chances of qualifying for this benefit.
Go Remote or Contractual!
Remote or contractual employees are better off in terms of reducing costs in general and some taxation costs in particular. Once you don’t need the require labor, you can end the contract. Furthermore, your contractual workers don’t qualify for medical taxes and insurances, so that’s your savings right there.
File Your Taxes
Paying your taxes is not enough. Make sure you become a registered tax filer and pay your taxes on regular basis. There are many benefits for registered tax filers that reduce the amount of payable taxes on various instances. Better yet, make sure you e-file your taxes to receive faster response on your tax refunds and benefits.
Business Equipment: One-Timer
Revenue Services in most cases, allows you to treat your business equipment as a one-time cost rather than having to depreciate it over its life span. With a certain upper limit set, you can purchase an equipment for your business and expense it out at the time of purchase, saving yourself the cost of capitalizing and depreciation.
Don’t Forget: Don’t Spend All You Earn!
Lastly, and most importantly, don’t spend all that you earn from your business. Business owners are unable to meet taxation costs because they don’t save up enough to be able to meet those expenses. Make sure you set aside a little more than your estimated tax cost and pay up well before your deadline!