Tax Tips: Save your Time, your Money & your Taxes
If you’re a Sole Proprietors, December 31st was your business as well as your personal income tax year-end. Now the task of putting all of your numbers and papers together ready for the tax man comes, if you have been diligent all year long and using that information to plan and streamline your business, I applaud you and keep it up.
For the majority of business owners, recording receipts and creating invoices is not their thing and not on the top of the priority list with all that must be accomplished in a day, this article will give you some tax saving tips you may not have known or thought about. Even if you are the “shoebox business” and just take the whole thing to your Accountant and have him do the numbers these tips will be valuable to make sure you are including all deductions you are entitled to.
Managing small business finances is all about the money in and money out. Any time you can reduce your costs, you improve your bottom line. At tax time, finding all your allowable deductions will help you keep more money in the pocket.
1) Make sure to deducted all of your business-related dues, memberships and subscriptions.
Most know that business licensing fees or business taxes are deductible expenses, but sometimes people overlook some of the annual membership dues they pay to business-related organizations. This could be anything from association dues, networking memberships, and business-related magazine subscriptions, so make sure you’re deducting all the appropriate fees. This could be a considerable deduction so don’t overlook those memberships.
2) Did you borrowed money to run your business? Did you know your can deducted all the interest and all the related fees for a business loan? Well you can and should.
The interest you pay on the money you borrowed to run your business is tax deductible. You can also deduct related fees, such as a fee related to your purchase or improvement of a business property, if that’s what the loan was for, this would include things like application, appraisal, and legal fees. For more information on this tax deduction, see Interest Deductibility and Related Issues for more details and to see if you are eligable.
3) Deduct all your insurance business expenses.
Life insurance premiums aren’t deductable, however you can deduct the insurance premiums you’ve paid for insurance on your building(s), machinery or equipment you use in your business.
4) Deduct all your relevant repair and maintenance expenses.
The full cost of both labour and materials qualify as a small business tax deduction on repairs and maintenance you’ve made to the property you use to earn income. If your home is your primary place of business, a portion of the total can be deducted as well read on under Office-in-Home deductions for more information.
5) Deduct the full cost of your office and supplies expenses.
The cost of paper clips, staplers, pens, and computer paper can really add up over the year. Depending on your business, you may also have supplies expenses, generally, supplies are defined as items consumed indirectly to provide goods or services to a client.
As many people run home businesses, for family-related reasons or otherwise, there are also certain home business tax deductions that home business owners should be aware of.
If your home is your main place of business, you may also be entitled to claim a portion of your home expenses Rent, mortgage interest, property taxes, insurance, utilities, telephone and minor repairs and maintenance are all eligable deductions. The portion you can claim will be based upon the amount of space in your home used for business.
You’ll find more information about calculating your office-in-home deductions in Calculating The Home Business Tax Deduction.
If you use your car for business, you may be entitled to claim a reasonable portion of gas, license and registration fees, interest, insurance, lease, maintenance and repairs, capital cost allowance and parking. Be sure if your vehicle is used for both business and personal that you support your auto deduction by distinguishing between business and personal use by keeping a car log to record your business kilometers. This will determine the portion of the expenses that will be deductable as a business expense.
If your spouse, common-law partner or other family member is employed by your business, a reasonable salary paid to them may be deducted. This may be a great tax-savings strategy for income splitting and reduction of the family’s overall tax burden.
You may not do your bookkeeping or taxes yourself but knowing the rules and knowing what you are entitled to deduct on your taxes can make a huge difference on your bottomline and that is important to all business owners.
Contact Business Angel Support Services if you need some help with your tax preparation. So you can focus on other important matters.
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