All businesses’ major goal is to grow and profit. They would limit expenses, acquire assets, and push for bigger sales. Unfortunately, as the business grows, the tax required also increases. This large tax amount usually leaves business owners with a feeling of loss due to the amount that they have to pay the government.
Most company owners tend to look for ways to reduce their tax amount. They would hire business accountants, like Westwoods BGA, to advise them and work on their tax requirements. Most of them would resort to asset repositioning, which is an effective way of minimising business tax, but there are less complicated ways to do so.
Here are simple ways you can minimise your tax:
Check Asset Values
The assets mostly have an effect on the amount of tax to be paid. Reassess the depreciation of your equipment and properties. You can save with the tax deductions from reduced and obsolete assets. Consider your stock performance as well. You may deduct the lost stocks from your taxes since it falls under income. Having said so, try to postpone your revenue as well. Have your receivables dated after the important date so they are not included in the computation.
Expenses lessen taxes, but it doesn’t mean you have to spend your business’s money on senseless things. Re-stock your company supplies before the end of the taxable year so the expense is in the calculation of the taxable income. You should reconsider bad debts as well. Write-off the uncollectable bills since this will reduce your indicated income.
Donate to Charity
In addition to increasing goodwill and enhancing your reputation, donating to charity is a good source of tax deductions. Most charities qualify as deductible gift recipients, in which the deduction is declarable on tax returns, as long as there are records of the donation. This works for both cash and non-monetary donations. Another option is setting up a foundation tied to your company, which has the same effect.
Minimising taxes is a tricky aspect of bookkeeping, due to the possibilities of tax evasion cases. There are legal ways to do it, but the best way to reduce taxes is to consult business accountants.