Tax planning for your business? Some year end things to keep in mind
It takes a lot of effort and a lot of heart to build your business from the ground up. Which is why as a business owner, it is your responsibility to establish your status as a reliable, tax-paying venture. Indeed, with the year 2019 coming to a close, it is time for entrepreneurs everywhere to get a head start on planning for the upcoming tax season again. So, as you begin planning for your company’s tax filings, here is a personal tax planning guide with year-end reminders that can help you with your tax efforts: Read More
- Maintain all important documents: As a business owner, it is vital that you safeguard your company against the threat of tax troubles. During the tax filing process, a simple slip-up or missing document can have huge consequences for the future of your company. Also, keep in mind you can make certain claims in your tax filings that should be backed by right documents. Both of these factors require the presence of valid, authentic documents to establish your credibility.
Therefore, as the first point in your personal tax planning guide, you need to make sure that you have all your important documents handy before the tax season even arrives. These include all relevant invoices, bank statements, receipts and balance sheets.
- Track and maintain payments: Similarly, it is essential that you keep all records of every last payment and transaction conducted by your business. Running a business can be hectic and we often delay tracking our overall business expenses, but expense-tracking is a process that can reap huge rewards in the long run, especially when it comes to filing taxes.
Your business expenses, especially if you run a small business, are open to a variety of deductions that you can avail on the amount of revenue generated. Common business expenditures such as cell phone bills, business meetings and meals, travel expenses and stationery can all offer deductions for your business provided you keep a close record of them all.
- Know your deductions: Being aware of applicable deductions for your business. An important aspect of tax planning is to help reduce the overall tax liability of your business and making the most of the various deductions offered by the Government is one of the most effective ways to achieve this.
Therefore, make sure to do thorough research on all deductions available and applicable to you and avoid paying tax amounts that are larger than they need to be. You will find that you can claim deductions for the expenses incurred in setting up or expanding your business, for everyday operational expenses, for donations to funds and charities as well as deductions specific to your industry and specific nature of your business. You can even claim deductions under Section 80C on your term insurance or life insurance premiums, which can provide ample coverage for your nominees and help safeguard your business. You can learn more about Term Insurance by browsing the website for the various Term Plans offered by PNB MetLife.
- File returns on time: What would a personal tax planning guide be without instructing you to file your taxes on time? The consequences for late filing of taxes can be a heavy penalty as well as paying interest on your taxes, and can wreak havoc on your company’s finances. Moreover, it is absolutely crucial for the well-being of your business that you establish your status as a regular tax-compliant company.
Which is why an important step towards that reputation is to plan your taxes way in advance and avoid running shy of the deadline. The paperwork and accounting for documents alone can take a while, so make sure to maximise this quality tax planning time and plan ahead.
- Seek professional help: As a business owner, you might be certain that you know exactly what is best for your company. However, when it comes to dealing with finances and most importantly taxes, a lot of entrepreneurs hesitate to seek help from professionals. So, for the best interests of your company, do not hesitate in bringing a professional on-board who can help you navigate the many tax-related details for your business. Even if your company is a start-up or a small business, there are many tax opportunities that can be explored by the skills of a tax expert. So, if you find yourself confused during your tax planning stage, bring a professional along.
Tax planning can be an extremely productive process for the future of your business, although it can also be challenging. Hopefully, with this personal tax planning guide, you can make the most of these year-end pointers that can lead you in the right direction.
*Tax benefits are subject to conditions and other provisions of the Indian tax laws and are subject to amendments made thereto from time to time.
The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action. Tax benefits are subject to changes in tax laws. Please contact your tax consultant for an exact calculation of your tax liabilities.
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