Small Business Tax Tips 2022 To Save Money And Time

March 4, 2022    Taxagent Perth

Running a business is not easy, but it becomes even harder with filing taxes every year. One of the easiest ways to handle this difficulty, as per experts, is to hire a tax agent in Perth. Making financial decisions without taking advice from an accountant or financial advisor can put one at risk and cost them more money in the long run. This is why a business needs to prepare its taxes properly and do proper accounting tasks. 

Read More:- Trust Tax Return: Everything You Need To Know About It

Small Business Tax Tips For Small Businesses 

Some tax tips for businesses to save time and money are-

  • Hiring the right accountant 

The accountant has to offer more than prepare financial statements and do taxes. If this is all they can do, they are not the right choice for the business. An accountant needs to work with the owner throughout the year to track income and spending, monitor net and gross profits, and ensure the business does not have a cash flow problem. 

Many small businesses do not hire registered tax agents as they do not understand the importance of accounting for the growth and survival of the business. 

  • Keeping adequate records 

To ensure the tax return is done properly, one needs to keep thorough and adequate reports throughout the year. With inadequate record-keeping, one could leave deductions on the table or put themselves at risk for an audit. Every business needs to invest in a basic version of accounting software as it is user-friendly, inexpensive and helps one keep track of income and expenses.  

  • Separating business from personal expenses 

Suppose the ATO audits the business and finds business expenses and personal expenses mixed despite reporting business expenses correctly. In that case, the ATO could start looking at personal accounts because of mixed money. 

One needs to have a separate credit card and bank account and run business expenses through those accounts. 

  • Understanding the difference between net and gross income 

If a product costs more money to make than it is charged, one can lose money regardless of the units they sell. Many small business owners forget to consider the difference in net and gross income. 

For instance, if a product costs $100 to be made and sold for $150, the gross income is $50. But after deducting the expenses, the net income could drop to $10. 

It is essential to know the gross and net profits to be more profitable and grow the business. Business owners also need to think about Small business tax returns that can benefit the business. 

  • Properly classifying the business

If one fails to classify the business properly, it could result in an overpayment of taxes. When an owner decides to classify their company as either an S corporation, C corporation, limited liability partnership, Single-member LLC, or sole proprietor can have different effects on taxes. 

Small businesses must consult with lawyers and accountants to determine how the business will be classified.

  • Managing payroll 

When one hires a company to assist in payroll services, they need to make sure the company is reputed. Some business owners hire common payroll services to save money but later find out that the service was not remitting payroll tax. 

If such occurs, the business owners are last for the payroll taxes. The ATO usually checks every quarter to see if payroll taxes are paid. 

  • Seeking accountant’s advice on a business plan. 

A good accountant advises on how to grow a business. A company needs to seek their advice to determine how much they contribute to the retirement fund or take a bonus or delay it for a year. The accountant can explain if buying a small space for a store or business other than renting it can help one save money.  

  • Taking advantage of capitalization rules 

When one acquires tangible property or equipment for a business, they could take a significant deduction. One needs to ensure the accountant understands the capitalization rules. 

  • Investing more in marketing 

If a business owner is still using the old ways of marketing, then it is a good time to implement digital marketing. It helps one reach out to more customers, increasing the probability of finding new customers. 

This can also benefit one from a tax point of view as marketing expenses are considered eligible for tax deductions. As a result, this cannot be considered a bad idea to increase the marketing budget. 

Read More:- What Is Goods And Services Tax, And Why Is GST Return Important?

Hiring Tax Agents 

To save time and money while filing taxes, a small business owner could hire a small business tax agent. Many business owners do not understand the importance of accounting in making a business prosper. But the business owners who want to hire a good tax agent could associate with Tax Agent Perth. The firm provides reputed tax agents who can help a business owner properly file taxes and get maximum tax returns as a benefit. 

Contact Tax Agent Perth Now!

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