The Top Tax Tips for Starting a Business.
We all know that paying tax can be a nuisance, so many big businesses avoid paying it with clever loopholes that are hidden in legislation. Since the average person does not have access to the top tax lawyers, we thought that we would create a helpful post on how to save tax.
It starts with taking action. If you have dreamed of starting a business, then it maybe time to take that dream and turn it into reality. When you own a business, it is so much more than a means of income. It becomes an income earning activity and you may suffer losses. Furthermore, the general expenditure associated with owning a business can also constitute a deductible.
Running your business from home?
That’s fantastic, if you have a sideline hobby that makes you a small profit and you run that business from your home. You can offset your expenses. Little things such as setting a portion of your home as a dedicated office-space can be considered a deductible, especially when you consider mortgage cost, insurance premiums and utilities.
What if you are renting in a residential location?
You are still entitled to claim a tax deduction, it does not matter that you are occupying someone else’s premises.
Should you incorporate your business?
Yes, this shows the IRS that you are treating this business seriously. You should consider the most viable option for your start-up. Are you a sole proprietorship or do you have partners? It is important for you to keep a record of all the profit and losses that are incurred if you are a sole proprietorship. If you travel a lot for your business, your vehicle can be considered as a means of transport that is servicing the needs of your enterprise. You can deduct petrol cost and insurance premiums. This will also depend on how much time you spend traveling, you need to keep proof to show the IRS.