I shared several tips that can help you make the most out of this period â€“ tax time. Here are some more that you can use, if not this year then the next.
Donâ€™t forget that your equipment depreciates.
You can get lower tax because of depreciation. While you might hate the fact that anything you buy (equipment-wise) depreciates in value, you can use this for your benefit. Come tax time, make sure that you take inventory of what you have in the business and calculate each pieceâ€™s depreciated value. In addition to this, do not overlook the fact that each piece of equipment or fixture depreciates in varying degrees and rates. As such, tag the depreciation value of each thing separately instead of lumping them together as one.
Employ family if you can.
While this might raise some eyebrows, here me out first. If you have family members who are fully qualified to take part of the business, then it should not be an issue, right? This also has tax benefits as you would be paying him money (which is essentially his as he is part of the family) and at the same time, shift your money to a lower tax bracket (from company to individual). More so, you can claim him as a dependent earning a wage, which can give you higher tax deductions.
Just one more day and everything should be over and done with. If you had more issues than necessary this year, do bear in mind some of the tips that we covered in this post and the last. Perhaps next year, it will be better.