Once you decide to set up your own business, the only thing that can truly stand in your way is getting sufficient funds for it. The investment capital is usually not that high, and the only thing young entrepreneurs think about is how to achieve the profit, break through, and get to the top in their respective lines of business. At the beginning, many sacrifices should be made, and there are going to be a lot of cutbacks, so they should have a good financial strategy.
Most make cardinal mistake, and decide to do many things on their own, like doing their own taxes, but either they neglect it completely, or do not do it properly. This article is about to tell you what is there to know about taxes, and what are some of the best saving strategies you might use in order to save a little bit of money when it comes to your taxes.
1. Strategy Regarding Utility Expenses
If both you and your employees are driving personal vehicles and using your own mobile phones for business purposes, they should be listed among other company expenses. It is probably going to be a long list of gas and phone bills, tolls, parking, and many other expenses that can help you reduce tax burden while you are at the very beginning of your career. When it comes to electricity, it can only be added to the list if you own a home office.
2. Strategy Regarding Medical and Dental Insurance
For those who’s start-up is a primary, full-time job, they can claim medical insurance for tax deductions. It can be for businessman’s wife, children, or dependent parents, it does not matter, as long as the company is not entrepreneur’s second job.
3. Renting an Office
At the beginning of their careers, entrepreneurs typically lack money to buy an office space, which is why they often choose to set up one at home, or rent a place. If the company is paying a rent, it should be listed under expenses, which will reduce the tax liability. This might also happen if the entrepreneur is thinking about moving the company offshore, whereupon he or she needs to consider the options specific to the chosen country. Therefore, they should fist find enough information on how to set up a company in a specific country and think about tax on every step along the way to save up every penny during the transition period.
4. Working with Family
When you are new in the business, it is hard to find someone who you trust to work for you, and help you build a company from the scratch. For that reason, it is good to hire someone from your family, someone you can rely on. Additionally, by hiring member of the family, you can reduce tax burden by paying them a salary and listing it as an expense. The only condition is that they do not have other incomes, but the one that you are providing them with.
It is of great importance that you fill in and pay your taxes on time, because if you fail to do so, your bill will increase due to penalties and interests that will keep piling up. There are also experts who claim that you should constantly keep track of your expenses, as there are many, and they are easily overlooked. Finally, if you are not sure that you are able to deal with your own taxes, it is always wiser to hire someone who specialized for it. Additional employee will cost you, but if he does his job properly, you will gain financial advantage that you want on the long run.