Month of December is all about merry-making, singing carols, and attending endless year end parties. There is no better month in the calendar that will raisen up our spirits and usher in loads of excitement as like December. But for business owners it is quite different. It is the month of hectic board deliberations to verify the financial numbers, attending to an array of lined up consultations with tax planners, financial advisors, and tax preparation service agents– You know why it goes like this? All to figure out, how best the business can save on taxes. And that too for small business owners, it’s a month that takes their toil. Perhaps a number crunching month with hosts of financial brainstorming.
Sanjay TaxPro Inc gives you a breather by suggesting Tax Deductable tips to save money.
- Expenses incurred for setting up Business
Keep a proper account of all the expenses incurred while setting up business such as advertisement cost, utilities cost, office supplies cost and other associated costs. All these costs can be deducted under current business expenses, provided you start the business operations. Small businesses will benefit a lot out of this, if they chalk out a detailed yearly Tax saving plan with tax saving targets for their business.
- Interest Payment
Let’s presume that you have taken credit to start off your business- at this juncture the monthly interest paid along with the carrying charges will come under tax deductible bracket. If you have availed personal loan and have utilized it for your business purpose, justify it with proper records to prove that it was used for business. By doing so you can save money on both business tax and personal tax as well.
- Taxes
If you are running a business, by default you are liable for taxes, and these taxes are generally deductible. The pattern of deduction varies on the nature of tax.
- Items brought for the businesses’ daily operations are levied sales tax, and the quantum of amount depends on the original cost of each item. It will not be deducted separately. Consultation with local business tax accountant in your business area will shed more light on sales tax, increasing your tax savings.
- In case of employment taxes, employer’s contribution is deductible under business expenses. However self-employment tax paid by employees will not liable for business expense deduction, as it is not a business expense.
- The component of Federal income tax which businesses pay on the income generated is not liable for deduction. However your federal return is liable for state income tax deduction as an itemized deduction, but not as a business expense.
- Real estate tax levied on the property used for business operations is liable for deduction, and so is in the case of any local assessments for repairs or maintenance. If the assessment is for anew enhancement or for an additional improvement- it isn’t liable for one time deduction, rather deductible over the years. To ensure a strong and stable financial position, small businesses can prioritize and focus much on Tax saving investments at the initial level, which will in turn will bring financial stability to their business.
This isn’t the end. You have lot more tax deductible tips for your business to save more on taxes. Find it out in our next blog.
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