Small business owners are always looking for ways to save money on taxes. Whether it is by seeking tax exemptions on gst on medicines if you have a healthcare business or by learning about various legislations for small businesses. In today’s economy, taxes are a huge concern for any small business owner. We’ll show you how you can save money on your tax bills with just a few simple changes. And don’t worry — this post will make it easy for you to calculate how much your business is saving!
1. Be thorough with filing returns
You should always file your taxes on time and in full so that there are no surprises when you get your refund at the end of the year. However, there are some things that can help you save even more money on taxes than usual by filing early and often.
If you’re unsure of whether your business is running correctly, consider hiring a chartered accountant or tax specialist who can provide advice and analysis of your financial statements as well as help with preparing tax returns and paying taxes owed. This will help ensure that all expenses are properly documented and that you aren’t overpaying or underpaying any taxes owed by the end of the year — something that could have significant ramifications if not corrected now. You should file your tax returns as early as possible and use all available tax credits, deductions and exemptions that you may be entitled to claim in order to maximize your tax savings.
2. Avoid paying in cash
Cash payment is so common because it is extremely convenient. However, if your daily cash payment exceeds Rs 20,000 then the income tax department won’t allow you to get the deductions you want. Hence try to split your payments in various formats for instance some cash plus some in cheque or electronic or digital transfers.
Increase your marketing budget
If you are investing in marketing then you automatically become eligible for numerous tax deductions. Hence, to make the most of these deductions you should increase the budget you allocate to your marketing expenses. If you are not doing any marketing then it’s best to start today so you can make the most of these benefits that you are currently losing out on.
3. Save money on business utilities.
While running your business you undoubtedly need various kinds of utilities like vehicles or phones. While these expenses often make a hole in your budget that you would like to keep purely for other things like marketing there is some good news. You can get a lot of exemptions and deductions on these expenses. All you need to do is show your expenses as expenses made for business purposes. This can significantly reduce your tax burden.
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4. Record your expenses
If you don’t already keep receipts for purchases and other transactions, then start now! The best way to keep track of what’s happening with your business finances is by maintaining a simple spreadsheet or journal that tracks all of your expenses and incomes during the course of a month or year. When preparing a list of expenses don’t ignore any detail whether it is the gst on mobile for office work or the marketing expenses.
By keeping these records in one place, it will be easier for you when it comes time to make decisions about how much money should be spent on maintenance and new projects versus how much should go toward paying off debt obligations or saving for future investments. However, if you don’t keep a record of your expenses you can get in trouble down the road when you are trying to get exemptions.