Such a huge portion of people’s wages are going into the taxman’s pocket. Even if you saved a certain fraction on this amount that you have to pay in taxes, you will have a lot more cash to spend on things that you really care about and that excite you. There is no question, unless you are an experienced tax accountant, the ins and outs of the taxation system can be incredibly dense and confusing. Most people dread when the time comes to fill out their tax return.
While it can be complicated, it is worthwhile having a professional accountant helping you with your books, especially if you have your fingers in a number of different streams of income. They will also be able to make you aware of certain tax breaks and deductions that you could utilise in order to save on your tax bill. If you choose the right accountant, their services will pay for themselves with the savings on your tax return over the long term. Here is some advice you should keep in mind when trying to reduce your tax bill.
Look At Every Expense
When it comes to business expenses, you need to question every last detail. By recording all of these expenses, you will be offsetting your tax bill as much as possible. Any time you are paying for something, you should think to yourself, is this a business expense? An expense is classified as a business expense if it is completely for the purpose of your business.
Keeping Detailed Records
Once you have analysed all of your expenses and decided whether they are able to be classified as a business expense or not, you need to develop an easy to follow system, whereby you can track every relevant piece of information when it comes to your revenues and expenses. Make sure that you file all of your receipts away in an organised fashion.
There is nothing worse than having to sift through hundreds and hundreds of papers and receipts come tax season. You should be minimising the amount of stress the process puts on you by being prepared when it comes time to file your tax return.
Ensure That You Claim All of Your Available Tax Credits
There are dozens of different tax credits that apply to different people and different circumstances. You need to check which ones apply to you as you could possibly be missing out on claiming some of these tax credits which can help to significantly reduce your tax bill.
If you are married, you should ensure that they are also receiving all of their relevant tax credits. For example, if your wife or husband stays home and looks after the kids during the day, they will most likely be entitled to some sort of home carer tax credit. There are also many tax incentives for new businesses that are starting off, as governments are trying to encourage growth and the rise of new startups.