Navigating taxes can be one of the most difficult aspects of owning and running a small business. There are a myriad of taxes rules and regulations which must be adhered to as well as a number of procedures which must be followed when calculating your tax liability. To help you, here are the top 10 tax tips for small businesses.
- It may sound like stating the obvious but make sure you submit your accounts, tax returns and all relevant paperwork accurately and honestly as it will save you major headaches and stress in the long run
- Keep and retain accurate records throughout the year and keep all receipts and invoices in a safe and secure place. This will eliminate the need for frantic searching for the relevant paperwork at the end of the tax year
- Make sure you keep a note of important tax deadlines and not just the end of year tax return deadline. You also need to remember the deadline for submitting your employee tax returns and any VAT return is applicable so as to avoid any unnecessary and onerous penalties
- Make sure you claim for all the allowances your business is entitled to. There is a large amount of allowances available to small business, so make sure you claim the allowances applicable to your business.
- If you are running your small business from home, make sure you are claiming any business expenses arising from the use of your home which can be offset against your final tax liability. This includes the percentage of the electricity bill apportioned to running the business and the utilities used in running the business.
- You should invest in an online accounting software package which will make your life much easier when it comes to calculating your taxes due. With such a package, your records are easily available and retrievable at any time.
- If you are a recently established small business, you may be entitled to claim allowances for any costs incurred as part of the formation of your business such as for any equipment that you may have purchased.
- If you are running a small limited company, make sure that you only declare dividends from retained profits as there are heavy penalties for doing otherwise.
- It would be prudent to set aside funds to cover future tax liabilities so as to ensure that you will always have funds available to pay your tax bill when it arrives.
- Make sure you hire a good and trustworthy accountant as his/her skills can save you money in the long-term. A good accountant can also give invaluable advice and guidance throughout the year.
Keep these tips in mind when it comes to tax time and you’ll be much more efficient and organised. Figuring out taxes can be a very daunting task, so having a few handy tips will always stand to you in the long run.
While taxes may not be the most exciting part of running your business, they do have to be tackled once every year, so it is vital that you keep on top of them as honestly, efficiently and as effectively as possible. Following these top ten tips will guarantee that you and your business will benefit into the future.
David Dunne is an online marketing consultant and blogger working on behalf of Aardvark Accountancy Services in Dublin, Ireland.