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What are Some Ways a Business Owner Can Reduce Taxes?
from:People who run there own businesses often wonder what are some ways a business owner can reduce taxes? It may seem that the taxes we must pay are set, but in reality there are ways that both business owners and others can reduce taxes. Here are some things to think about when you’re wondering what are some ways a business owner can reduce taxes.
Know the deductible expenses – The first thing you should look at when you’re wondering what are some ways a business owner can reduce taxes are the deductible business expenses. According to the IRS, a business owner can deduct any reasonable business expense. So, for example, purchasing a computer for your home office is a perfectly acceptable business expense, as is your cell phone bill, if your cell phone is used for business. Even the clothes you wear are deductible if you’re required to wear a uniform.
Keep track of your mileage – Mileage you put on your car for business is also deductible. Keep a mileage log of trips you take for business – be certain to note the purpose of the trip each and every time. At the end of the year, put your mileage log with your tax receipts and start a new log for a new year. When it’s time to do your taxes, figure your deduction by using either the "mileage" method (you deduct a certain dollar amount for each business-related mile you drive) or the "actual expense" method (you can deduct the total you pay for gas, repairs, plus depreciation -- according to a tax code schedule -- multiplied by the percentage of business use). Figure it both ways and take the method that benefits you more. This is one of the most overlooked deductions when people wonder what are some ways a business owner can reduce taxes. It’s overlooked simply because you have to keep track of the expense nearly every day for the whole year, and many people are just not diligent enough about it.
Keep receipts – One of the most important things you can do as a business owner is to keep receipts for deductible business purchases. Keep a log of all your mileage, and put all of your business receipts in folders or envelopes by category. If you suffer an audit and can’t produce receipts, knowing what are some ways a business owner can reduce taxes won’t help you at all. Everything you deduct needs a receipt. Keep your cell phone bills, too.
Keep track of entertainment expenses – Another often overlooked item when people wonder what are some ways a business owner can reduce taxes is entertainment. Under the current tax code, you can deduct 50% of what you spend entertaining clients. Qualified entertainment includes anything from taking a client out to dinner to taking him to a sporting event. However, if your business throws a party or event for employees and their families, you can deduct 100% of that expense.
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Tax Savings Account Interest News
Province moves to protect tax-free savings accounts (The Journal Pioneer)
Attorney General Gerard Greenan recently introduced legislation that will clarify how the proceeds from the new Tax-Free Savings Accounts (TFSAs) may pass to beneficiaries after the account holder's death.
Read more...December the best time to evaluate tax breaks for clients (Investment Executive)
With the end of the year approaching, Canadians seeking tax-savings opportunities should be diving into their annual tax planning now rather than waiting until the spring, according to CIBC’s managing director of tax and estate planning, Jamie Golombek.
Read more...Liberty Tax Advises that Theres Still Time to Cut Your 2008 Tax Bill If You Act Now (Business Wire via Yahoo! Finance)
VIRGINIA BEACH, Va.----The tax savings you reap in 2009 will depend on any additional tax cutting measures that you can take before the end of 2008, advises Liberty Tax Service. Take the time to review and organize your tax records and identify more deductions that you can take on your 2008 return.
Read more...Savings Providers Slash Rates (The Motley Fool)
Savings providers have started slashing their rates following the recent base rate cut.
Read more...National Bank Financial Group to Offer an All New GIC Transferable to a TFSA (Marketwire via Yahoo! Finance)
Effective immediately, National Bank Financial Group is offering an all-new non-redeemable Guaranteed Investment Certificate, at a rate of 4.10%, that will automatically be transferred to a Tax-Free Savings Account at the beginning of January 2009.
Read more...