Small Business: Best Tax-saving Hacks in 2018

When was the last time you filled joyous while filing tax? Well, you are not alone as almost everyone despises filing tax. However, there is no running away from it. You need to make sure that you fill tax properly.

As a small business, it becomes more important for you to fill your tax properly. If you fail to do, it can impact your business operations and can also levy heavy penalty on your current assets. To ensure that you don’t have to go through the bad experience, we will list the top tax tips for the year 2018. By following these tips, you will stay at that top of your game, and focus on what matters, i.e., your business.

The tips are also very useful for newbie bloggers. It is common to see new bloggers rising to fame in short period. However, they might feel stuck when it's time to start paying tax.

Tax Filing Software

When starting out your business, you might think of saving money by spending only on important things. It is common to find small business tax filing software completely, either unknowingly or instead to decrease investment cost. However, the opposite is true. A tax filing software can help you save not your precious time, but take care of small things such as due dates, receipts and so on.

You can try out Turbotax, one of the best choices for small business when it comes to filing tax.

Tax Deadlines

Tax deadlines are crucial. They just cannot be missed. And, if you want IRS not to disturb you, you should ensure that you note down the deadlines carefully. For a small business, there are different deadlines as they might need to do tax submissions in quarters. If you keep a tab on all the deadlines, you are protecting yourself from all the tax penalties during the annual return. If you are curious and want to know about all the federal due dates, check out this link.

Backup all receipts safely

Receipts act as a proof of how and when you spent your money. Also, if you want tax deductions from some specific expenditure, receipts is the only way to take advantage of it. For starters, they should always keep a backup copy of all the receipts. It can be a xerox copy or a scan on your USB drive. By doing so, you can stay at full peace of mind and don’t have to look for receipts at the last moment.

Normally, small business doesn’t have a hard time when it comes to backing up receipts. If you are not sure how to approach, you can use 1tapreceipts. It is a simple to use and help you backup all your receipts in one single place. As you might have guessed it, you can export the receipts whenever you want. The app Not only that it also create useful tables with information from each receipt using artificial intelligence and machine learning. Either it’s your physical store receipts, or a website billing invoice, one should always keep track of the finance documents. There are a number of website building options where business owners generate dedicated receipt backup options for effective management.

Estimated tax payments

As a small business, you can focus on regular estimated tax payments. This is a good strategy if your small business is making a lot of money. By paying regular taxes, you will save a lot of tax payment for the huge amount of money you are making annually.

Donate to Charities

If you believe in doing something good and at the same time save tax, you can donate to charities. It is one of the best ways to save tax and will also give you the ability to do something for the society around you. If you are not sure the crux and complexities of donation and tax benefits, read this brilliant piece from Forbes to get a better grasp.

Mark home office expenses as deductible

It is common to find small business working from home during their initial period of operation. This should not let small business owners deduct expenses about home office. The expenses can be anything ranging from internet service payments, repairs, mortgage and so on. However, before doing this, you should be sure to mark which portion of your house is being used to run the business.

Family members can help

Family members are a great source of inspiration. They can also help you save tax on your business. Yes, you read it right. You can apply for tax savings by hiring family members and show that you are paying the said person a certain amount of money monthly. This trick is very useful and helps you reduce your taxable income considerably.

Personal expenses should be kept apart

Personal expenses don’t qualify for the tax benefit. If you own a small business or working from home, you might mix your business and personal expenses. By doing this, you can bring trouble when filing your taxes. The proper way to manage it is to make sure that you identify the business expenses and note them down regularly.

Do more homework

Tax filing is a daunting tax and is also time-consuming. To make sure that you don’t need to get overwhelmed when the final date arrives, you need to do some homework. You can star prep work a month or few weeks before the tax filing date. This will ensure two things. First, you will become stress-free and focus on your business. Secondly, you will indirectly not forget the tax filing due date.

Conclusion

We went through the top tax tips for the small business in 2018. It doesn’t matter how small your business is, you should always focus on tax filing. It doesn’t matter if you are running a small pizza shop or a restaurant, it just cannot be ignored. As we discussed, you can either use software to keep track of everything or do it manually. Also, starting early can give you a distinct advantage. In short, keep informed and be ready, and you will always file your tax on time.

So, what do you think about the tips shared in the article? Comment below and let us know.