Minimizing taxes and maximizing profits is the focus of any successful business leader. However, many people know only the rudimentary steps required to affect major improvements in their tax expenses and overall profits. Here are a few tips that will get you on the right track to keeping more money year round:
4 Tips to Save on Business Taxes
Contact a Professional
The absolute best advice you can get is to work with a tax specialist who is knowledgeable in all matters of business tax law. A qualified accountant will be able to point out some of the more complex tax ideas that can save you money. These are ideas which you would likely never discover on your own. A business tax professional can also ensure that whatever tactics you choose to use are above board, and safe from causing red flags with federal and state tax authorities.
One of the most universal ways to reduce your taxes either as an individual or as a corporation is with the help of charitable giving. The Canada Revenue Agency has a handy online calculator for determining how much of a tax credit you can expect for your giving if you live there. Many other countries offer a similar tool.
Plan Your Major Purchases
Major purchases can often be deducted from your end of the year taxes as re-investment of your money into your business. Obviously, the more you invest in the infrastructure of your company, the higher your profits will climb, so this is a win-win. Plus, you can wait until the end of the year to determine how your taxes are looking before you commit to a major purchase. This ensures that you don’t overspend, and gives you maximum investment power at the end of each fiscal year.
Watch Your Invoices
If you’re concerned about taking a big tax hit due to end of year projects reaching completion, there are some ways to minimize your tax responsibilities in the immediate future. For instance, you can wait to invoice customers for a portion of the work until the next calendar year begins. This will stretch your tax obligation out over the next full year and give you a strong head start.
When in Doubt, Trust a Business Tax Pro
There are plenty of simple ways to start saving money on taxes today and push your business profits to the next level. Charitable donations, major purchases, and careful invoicing can all help manage your tax obligations in the near term. However, the best way to save on taxes long term is to consult with a business tax specialist who can create a plan for your business and guide you toward hidden savings.
If you live in Canada and would like to learn more about saving taxes and boosting profits today, I invite you to contact Padgett Business Services and schedule your consultation in their Calgary, or Okotoks office.
About the Author: Gerald Hunt
After graduating from the University of Calgary with a Bachelor of Science degree in Computer Science, Gerald joined KPMG (Formerly Thorne Riddell) as a Computer Accounting Customer Service representative. In this position, Gerald installed accounting systems in over 200 different small to medium sized companies over a 6-year span. In 1989, Gerald left KPMG to continue working with small business clients in his own corporation, installing computer accounting systems. While in this role, the DeVry Institute of Technology in Calgary engaged him to teach various courses. In time, Gerald moved up through the ranks of DeVry until he attained the position of Director of Finance for the Calgary Campus. He also acquired his Masters of Business Administration from City University of Seattle, Washington in 2001. Gerald’s career has always been focused on small business, accounting, and education. Need accounting help? Visit Padgett Business Services, and book a free no-obligation one-hour consultation.