As the owner of a small business, you’re having to stay on top of your finances on a continuous basis whether it’s ensuring you’re sticking to your budget plan, or keeping abreast of your daily expenses. In order for your business to succeed, it’s vital that you do what you can to save as much money as possible as well as to cut costs wherever you can.
As the owner of a small business, you’re having to stay on top of your finances on a continuous basis whether it’s ensuring you’re sticking to your budget plan, or keeping abreast of your daily expenses. In order for your business to succeed, it’s vital that you do what you can to save as much money as possible as well as to cut costs wherever you can. One of the areas in which you can make your savings count, is on your tax returns. However many small businesses tend to find the tax process rather daunting and quite stressful. This doesn’t have to be case though. Here’s four tax-saving tips for you and your small business.
Diarise those dates
This is something that may seem fairly obvious, yet it’s often forgotten. It can really help to know the exact deadlines for filing your tax returns so that you can ensure that you have all your documents in order for when the dates come rolling around. Make a point of diarising the dates to avoid a last minute scramble and the possible penalties that inevitably accompany overdue submissions. It’s also recommended that you file your tax returns in person so that you can iron out any problems you may encounter, then and there, with a SARS representative.
Clearly define your home office
In order for you to be eligible for home office deductions, there are certain criteria the home office space has to meet, such as these two examples:
- Firstly, your home office has to be distinct from the rest of the living space – this means there has to be a clear line between your workspace and the rest of your home.
- Secondly, if you are using a computer for your business (and in all likelihood you will be), the one in your office has to be used solely for that purpose. If the computer in your workspace is the only one in the entire house, then it will be rather difficult to prove that it’s only used for doing business-related work, and not for personal use as well.
When it comes to your home office, make sure everything is well-organised and that all records and documents are filed efficiently. You have to be able to prove the deductions you make with regards to conducting business from a home office and, being neat and organised will most definitely assist with this.
Track your business expenses regularly
Having a reliable and efficient account and record-keeping system in place is key when it comes to tracking your daily expenses effectively. You need to collect and keep all receipts relating to legitimate business expenses so that when the time comes, you can refer to them in order to work out the tax deductions your business is entitled to receive. Using a company credit card is an easy way of keeping track of expenses, yet it’s important to be responsible when using one as well. The following three things can be considered legitimate business expenses:
This will depend on the type, extent and duration of the trip, but the general rule is that if an expense is incurred in the process of generating income, then the expense can be deemed a business expense. If you’ve gone on a trip to meet with a potential client, then this would apply. It’s important to keep all receipts regarding petrol, travel and accommodation so that these can be factored in later on when doing those taxes.
Helpful hint: Be realistic when it comes to spending. For example: a trip to the spa at your hotel would not be considered a legitimate business expense, but rather a personal one.
Entertainment and meals
When taking out potential or existing clients for coffee or a meal, this can very often be considered a business expense. Even snacks during a brainstorming session with colleagues can qualify and can be deducted from your tax return.
If you or your employees take part in courses or conferences that directly apply to the job and can ultimately improve skills and performance levels, then in most cases these can be deemed valid business expenses.
Enlist the help of a specialist
At the end of the day, having an expert help you with your taxes never hurts. Tax specialists can advise you on what you can do to save more and conduct your business in a way that is more beneficial to you as the tax payer within a small business. It does help to know the basics so that you can get by on your own, but assistance from a professional will almost always stand you and your company in good stead.
Why not consider enlisting the help of a leader and expert in the online accounting software world, such as Sage One? To find a qualified Sage One adviser, click here. As a small business owner, you can rely on them to achieve all your online accounting andpayroll needs.
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