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Planning and preparing for tax payment well in advance can help you save both time and money. But, if you haven’t started preparing for the tax season, don’t fret. Experts from the top Edmonton accounting firms suggest the following tax saving tips for business owners.
1) Maintain Books of Account
Hire an accountant to maintain all your transactions in the accounting format. Maintaining books of account or bookkeeping can help you in keeping a track of all the income from different sources and the expenses of your organization. It will also help you to see where you can save taxes and claim returns wherever possible.
2) Keep Personal and Business Finances Separate
A common mistake that business owners often make is mixing their personal and business finances. It’s important to have a separate bank account for your business. Separating business financial statements from personal finances help in getting things organized during filing taxes. Mixing both these finances and their accounts can only create confusion and affect the tax filing procedure.
3) Deduct Home Office Expenses
If you don’t have a proper office space and work from home, you can still save on taxes. As you consume and use parts of your home resources, you can deduct expenses like your mortgage interest, insurance, and utilities and reduce the amount of tax to be paid. Talk to a tax consultancy firm to understand how the deduction amounts can be calculated.
4) Deduct the Vehicle Expenses
Just like the resources you use at home, you can also deduct the vehicle charges to save tax. If you use your car for business purposes, you can claim it as an expense. Other expenses that include in your vehicle expenses are fuel, repairs, maintenance, and the insurance premiums.
5) Categorize Income Under Various Heads
Different interest rates are levied on incomes under different heads. The taxable rate for income under different heads may vary. Some income may be even exempted under certain heads. Therefore, categorize your incomes appropriately so that you don’t end up paying more tax.
As a business owner, there are several taxes that you may have to pay. For more tax saving tips, contact a tax consultancy firm. If you want to reduce your tax expense, then start planning for taxes right away. If you need any assistance in tax planning for your business in Edmonton, then get in touch with professional tax consultancy or top Edmonton accounting firms. The professional firm will not only guide you to plan for your taxes better but also assist you in timely filing your tax returns.