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The IRS collects over 3.4 trillion dollars from United States citizens every single year. Of that 3.4 trillion dollars, a massive about comes from business owners.
Therein lies a constant gripe for many people trying to run their own organizations… taxes are incredibly expensive and burdensome.
Fortunately, thanks to the way business tax codes are written, there are a few lucrative strategies businesses can leverage to save big time on what they owe the government.
Below, we outline 3 of our top business tax saving tips!
1. Meticulously Separate Business and Personal Expenses
The more expenses you can claim as a business, the less taxable income you’ll have to worry about when it comes time to file a tax return. Because of that, if you’re a sole proprietor or a small corporation who has a lot of crossover between business and personal expenses, you’ll want to get that untangled.
The better you can suss out when your money is going to your business, the more efficient you’ll be in claiming expenses. A great way to get started doing this is to create separate business and personal accounts. Once that’s done, only use your business debit/credit card for business-related purchases and your personal card for personal ones.
This separation at the point of purchase will make reviewing bank statements and itemizing expenses easy at the end of the month!
2. If You’re Required to Do so, Pay Your Taxes Quarterly
Quarterly taxes tend to be one of the biggest kicks in the behind when it comes to new business owners. Since some tax systems require that you pay taxes as you get paid, simply waiting until the end of the year to send a lump payment into the government won’t cut it.
There are lots of good quarterly tax estimation calculators out there you can leverage to figure out how much you owe. Once you know what needs to be paid, be sure to make scheduled deposits on the US Treasury website by the posted due dates.
3. Use Excellent Accounting Software
If you’re finding yourself lost in a sea of business tax codes, company income, expenses and more, you can get your life organized by simply investing in a program like QuickBooks or FreshBooks.
Programs like these allow you to sync your bank accounts and automatically sort business and personal expenses. This takes the work out of needing to track receipts and separate everything for yourself in confusing spreadsheets.
Getting good accounting software is also one of our top tax saving tips because the software should automatically calculate how much you owe in taxes so you never overpay! You can also take it a step further and find remote QuickBooks bookkeeping services, that will make it a complete hands off approach.
Wrapping Up Business Tax Saving Tips
Taxes can be burdensome on business owners but if you’re organized, maximize your deductions, and only pay what you really owe, it can be a lot simpler.
To get started, begin putting into effect the tax saving tips listed above. When done in tandem with one another, they will lower your tax burden, help you avoid fees and substantially reduce your tax-related stress!
If you’re looking for more tips on how to improve the financial health of your business, check out more content on InNewsWeekly today!