Introduction
Businessmen are always worried about taxes. Owners of small and medium sized businesses are even more worried about different kind of taxes applicable on their business. In this regard the most important thing which business owners need to do is make sure that they should keep proper record of their invoices and other important documents and complete all the responsibilities on their part. Besides that owner of the businesses also make sure that they have to all necessary steps through which they can reduce the amount of taxes in order to increase the profitability of the business. Following are 10 amazing tips regarding tax business.
Step 1
Write Off the Deductions
If you want to reduce the tax business amount you have to deduct all the expenses incurred on the business from total income in order to reduce the taxable income.
Deduct Employee Taxes
When you run a business you have employees and from their salaries you have to deduct all the necessary taxes which are applicable on them such as withholding tax, income tax business and other taxes.
Quarterly Estimates of Taxes
In order to get a good idea of total amount you have to pay in terms of taxes, you need to prepare estimates. If the estimate is on quarterly basis then it is easy to handle as in case of failure to pay tax business can face cash flow problems and IRS penalty charges.
Step 2
Sales tax
There are some items exempted from sales tax business such as medicines and food items but remaining items are taxable and businessmen need to register in order to collect sales tax from the customers.
Keep the Record
In order to avoid any inconvenience it is advised that tax business owners need to keep the record and other important documents in good condition even after audit. The standard time period of keeping such record is 7 years.
Step 3
Charitable Funds
When businesses contribute in charitable activities or donate some amount to any such organization that amount is deductable from the income and it reduces the taxable income also.
Tax Deadlines
Business owners need to remember tax deadlines in order to smooth the tax business transactions. 15th April is remembered by all the business owners but there are some other dates to remember also such as last dates for estimated tax returns.
Features
Deduction of Loans
As business loans are not the part of income therefore it is important to deduct such loans from your income in order to reduce the taxable income of tax business.
Audits
IRS audits are of different types such as correspondence audit in which IRS will ask you about any document which you have to provide them within specific date. The other types of audit are office audit, field audit and criminal investigation audit of tax business.
Comments
Look at the IRS Website
IRS website is really helpful in understanding the whole tax process. There is huge information available on that website for business owners. One needs to search for the desired topic on that website and see how much useful information is available there especially on topics such as employee taxes and different deductions.
