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At the beginning of every financial year, business owners don’t seem to mind the amount of tax that they pay. While most would be looking for ways to spend not more than what they owe, there are others who work on increasing the possible tax refund that they will get. Tax refund helps you secure your future as well as that of your family for it means nothing less than savings. While paying taxes is part of your duty as a business owner, there are ways you can do to help reduce your tax liability. How do you do it?
· Tip 1: Be Charitable
Allot a part of the company’s income to donation. Various charitable institutions are exempted from tax collection. Donating to these institution allows you to have a substantial amount of on-refundable tax credit. Community groups, religious organizations, non-profit hospitals, and colleges are just a few of the institutions you can donate to. When you put money into any of these institutions, you can collect part of the amount, up to at least 75% of your income.
· Tip 2: List Down all your Work Expenses
If you are required to make payouts as part of your employment but are not refunded by your employer, you may be able to use it as part of a tax claim. Cell phone and laptop use for work are usually not reimbursed by the company; thus, making them eligible for tax deductions. All you need to do is make sure that you put on record all of these to be able to make a claim.
· Tip 3: Keep a Record of All your Medical Expenses
Your health plan does not cover several medical expenses. These expenses may be claimable as a non-refundable tax credit. Whether it is the payment, you made to the doctor, attendant care fees and even the ambulance service. All of these can be filed as part of your tax return. Hence, make sure to keep on record all your medical expenses as they could bring about huge savings on your part.
· Tip 4: Work from Home Services are also Included
If you are an owner of a start-up business operating from your home, you can also avail of tax deductions. Most of the expenses that you incur to be able to make income are almost always tax exempted. A portion of the rent, internet expenses, office supplies as well as part of the other maintenance costs are tax refundable.
Keeping a record of all these data and its supporting documents before the filing of tax returns should be a priority. Not only will it help you keep track of your earnings, but it could help you save a lot in the long run too. Don’t wait until the end of the financial year to do it.