Tax Planning Tips for Self Employed Business Owners

Posted by tanyahushe47 on July 4th, 2015

Have you just started your own business? Have you taken necessary steps to plan your taxes? Or, Do you want to know how to plan your taxes?

Whether big or small, businesses always have to make efforts for tax planning. This is why businesses always seem worry about managing their taxes throughout the year. To help you find solutions to their problems, private and public institutions provide valuable assistance. It becomes even more important for startups, in order to sustain and create a strong foundation for business growth. Tax planners and consultants work with company’s accountants, reviewing past and present performance of the company under existing jurisdictions, and suggest necessary amendments and improvements in financial operations, so that the business can move smoothly when new tax laws will take effect.

In addition to tax consultants and planners, tax lawyer is another professional that provides insights of existing and anticipated tax regulations business has to take care of. If you operate in North America and expanding, tax law lawyer Canada can help you in understanding various tax regulations pertaining with your industry. Business services such as barrett tax law are quite famous in this regard.

So, if you just got self-employed, you’ve got to make sure you remain for long. Follow these tips for tax planning:

1. Learn About Expenses

It’s one of the major concerns for startups and small businesses. People usually cannot differentiate between expenses they can include in profit and loss statement, or the ones that are not to be included.

• If you have a car that’s used for business purpose, include its maintenance expenses, upgrading cost or other related expenses. In order to calculate legitimate expenses, you must have complete information about the purpose, date and the amount spent. It’s a bit lengthy process, takes a lot of record keeping, but if you can do it, you’ll save some amount.
• Petty-cash expenses are typically related to business and they should be recorded. Imagine, if you spend 0 each day from petty cash, how much you would have spent during the whole financial year? Even if you don’t spend that much, these expenses will save you from paying higher tax.
• Bank charges, carrying charges and credit card charges are legitimate business expenses, not charged to individuals though. Remember, fines and penalties are not included in these expenses.

2. Move Income and Expenses

According to Canadian tax lawyers, you can do these quick things to minimize your taxes:

• Check your business tax situation using a free software program. It will show you a big picture to help you estimate your profits.
• Consider whether you have great revenues coming in next year. You need to be realistic.
• Consult a tax planner to discuss strategies how you can achieve your targets.
• On the basis of this information, discuss timing income/expenses between current and next year to minimize taxes.

In order to follow these tips effectively, you need professional assistance from tax consultants and experience tax lawyers. So, discuss with them and keep learning.