What if I tell you more than 68% of businessmen pay more taxes than they owe?
Does this mean people feel good to pay extra tax? Definitely, not!
There is nothing called as a good tax and certainly, nobody likes to pay extra tax for sure! This is why it is important to know where you can save money in order to invest that money back into your business.
Here are 5 tax savings tips to help your business get less expensive to run:
Well, this doesn’t directly help you save taxes, but surely will help you avoid tax mismatches penalties.
Software like Vyapar can help you prepare GSTR reports based on the sales/purchases you’ve made with accuracy. Also, the software calculates the right amount of taxes to be paid much faster ensuring you don’t miss deadlines.
Do preserve all the receipts you’ve received so far. This is the only proof of how you’ve spent your money throughout the year. They can be deducted on your taxes by reducing your taxable income. Depending on your business structure, there are specific deductions you can take and the proof is all you need.
Of course, keeping receipts for an entire year is problematic, you can store them digitally, saving space, with easier access; many pieces of paper get misplaced or damaged.
A self-employed like you can reduce tax by paying towards a retirement account. This money isn’t taxed until the funds are withdrawn in retirement. Luckily, saving more today means a better tomorrow and also a better today.
Having a handsome amount when it’s time to sit back and relax in your old age is actually a wonderful idea, isn’t it?
Some deductions may not be fully used in one tax year, you can carry it over into next years. These can include items like capital losses, net operating losses, home office deductions, and charitable contribution deductions.
Track these expenses (or have your software do it), so you don’t forget them from one year to the next.
What if I tell you that mistakes you’ve made can save you money? An honest mistake, of course! Yes, some penalties, e.g failing to file a tax return or to pay on time, are eligible for penalty relief.
But, this comes to your help-
If you’ve tried to follow the legal requirements but were unable to meet them due to circumstances beyond your control, or
If you were able to resolve an issue pointed out in your penalty notice.
Although not everyone in these two groups qualifies, it’s worth finding out whether you do. All in all, to save taxes in your business you don’t have to be a tax professional, you just need to be a smarter businessman.