Tis’ the season to be jolly…or not. Especially not come tax season…
Yes, that dreaded thing we all have to cough up at the end of each financial year whether we like it or not. There’s no getting away from it, it MUST be done.
But alas, there is a silver lining to the tax cloud that took me a long while to discover and I’m going to share that with you.
It’s known as deductions. A way to save a bit of money on your tax bubble.
For so many years I lost money to the tax man because I was uneducated (and going at it on my own) as to what I could and couldn’t claim. In fact, I didn’t even know I could claim anything.
I didn’t consult an accountant because I thought I was clever enough to do it on my own. Little did I know that it requires a lot more than just an awesome personality.
Everyday things that I used for work could have been deducted from my tax payment as a business expense.
So, let’s talk a little bit about tax deductions.
Across the board, and regardless of what country you live in, you will have tax deductions.
In short, things that benefit your business, and are explainable as such, may qualify as a deductible.
These deductions reduce your taxable income- yay. But it does take some work.
You must be able to prove and explain these deductions to the tax man during your claim.
Then there are also considerations for concessions, offsets and rebates which can reduce your payable tax.
Small businesses such as sole traders, partnerships, and also companies and trusts can benefit from this option depending on your annual turnover, business model and so on.
Things like foreign income and research and development costs may all be offset depending on certain criteria.
Now these things may seem like simple expense, but you cannot imagine what a difference it makes financially to make those savings every year.
Tax is as complicated as it is unavoidable. More so than you think. And you want to make sure you pay it. If you don’t you risk tax evasion charges and possible prosecution- so be smart and pay up.
But do keep it Professional by hiring an Accountant. That is the best advice I can give you.
They are trained yearly according to the latest tax requirements and updates. They know what they are doing.
Even if you have to spend a few tough dollars on your Accountant, it really is worth every cent, especially if it keeps the taxman from knocking at your door.
One thing I will remind you of is the total lack of control we have over the future.
So with that I want to encourage you to be smart. As important as it is in business to make money, it is more important to save money.
Always make sure you have some ‘mad money’ stashed away for a rainy day, and also just because.
Whatever you don’t have to pay in taxes for your business, save!
Open a savings account attached to your business or personal account depending on your business model.
Then directly transfer those offsets into that account. You will be pleasantly surprised how quickly it all adds up and puts your finances in a favorable position especially if you have a good interest rate too.
Great for sustainability!
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