As a business owner, you should know the financial transactions that undergo under your company’s name. And these include your taxes as well. You have to think of ways of how much you can save on taxes so that you can use the financial capital on other important things.
With tax saving methods, you can make your business competitive and sustainable. So if you are wondering how you can save on taxes, we’ve listed a few tips you can follow in the next tax filing year.
1. Keep a record of every expense
When running a company, there will be a lot of transactions that you do under the company’s name. Whether it’s big or small – you have to make sure that you’re recording everything. Because if you’re not recording, you will end up paying more taxes than the original amount.
Moreover, when you keep records, you can understand your business more as you will know in what areas you’re spending more and where you need to focus more. It’s the reason why bookkeeping is important for your company.
2. Go digital for transactions
Do you know that you can’t claim deductions if you do cash payments? It’s a new rule that came under Income Tax Act. So, if you’re doing cash payments, then you will have to more taxes when filing.
So, always do digital payments or through a check or use online banking services like NEFT, IMPS, etc. Always ask your customers to do online payments.
3. Get a loan
Having a loan means you can claim it under tax savings. You can save a lot by having a loan and showing it when filing taxes. So, if you’re thinking to expand your business, always take a loan provided that you are satisfying all the eligibility criteria.
4. Donate some amount
Donations and charity amounts can be claimed under tax savings when filing for tax returns. Don’t forget to mention the donation amounts if you did it under your company’s name. It’s particularly helpful for entrepreneurs to raise a good name for their business. When you appoint an auditor, you can know more tips like this. Read here: a beginner’s guide to finding a good tax auditor.
5. Book travel tickets under the company’s name
If you are booking travel tickets, do it under the company’s name. You can show these costs under tax savings. You can either reimburse the amount or you will get it back when you file for tax returns. Whether it’s a big or small trip, don’t do it under your name. It will get under a personal expense which can’t be claimed under tax savings.
Invest in an accountant
If you’re not sure about the tax savings and how you should manage your finances, then it’s better to invest in an accountant. Your finances will always be under the monitor and you can easily track the money flowing both in and out of your business. You can learn anything you want from the accountant and you will also have more time in focusing on other aspects of your business.