Monday, 17 February 2014

Tax Organization Tips for a Business

Having a properly organized system of cataloging and classifying business expenses and other finances will go a long way in reducing the level of stress that is seen in companies when the end of the fiscal year is rapidly approaching. It will also reduce the amount of money that you would have to pay out to accountants and other bookkeepers Contractor Calculator, as they would not have to spend a lot of man hours trying to trace transactions that took place weeks ago.

A good system that records and stores all business transactions is also very advantageous when it comes to claiming tax benefits and tax breaks. The good system is the one that has categories for all manner of business expenses that are incurred by the business in its course of operation.
Some of the categories of business expenses include:

1)    Administration Expenses
These are expenses that are incurred by the management of the business as they represent the business in various meeting with outsiders. These expenses are tax deductible, as long as they were incurred in the course of doing business, and were not expenses related to personal use. Examples of such expenses include accommodation expenses in hotels during business trips, and the cost of transportation to meetings and conferences that are related to the nature of the business that the company is active in.
2)    Advertising and Promotions
Expenses that are tax deductible also include those incurred while advertising and promoting the business on the various media now available. This will naturally include the cost of making adverts for television, and for placing ads on the internet. It would also include the cost of setting up and maintaining a website for the business.

3)    Automobile Expenses
The cost of buying, maintaining and servicing cars and other vehicles purchased under the name of the company is a business expense that is also deductible by law. It is also important to note that in this category, any expenses that are made by the business to improve the aesthetic appearance of the car while not helping the business expand its reach or engage in business activities would not be accepted by any revenue collecting activity. All expenses have to have a commercial reason behind them; otherwise they will not be tax deductible and even presenting them in your tax forms might lead to penalties that could harm the financial muscle of your business.

4)    Employee Benefits
Many of the benefits that a company avails to its employees can also be presented as the cost of doing business and can thus be used to apply for a tax break or a tax benefit. Examples of some of these benefits that employees enjoy include insurance benefits Contractor umbrella calculator, housing and hardship allowances.

5)    Office Costs and Legal Fees
The cost of procuring items to be used by the business in its official capacity is also tax deductible. The business expense of hiring professionals like lawyers and accountants is also an expense that can comfortably be used to claim a tax break from the government.

1 comment:

  1. Tax rules changes over night and people who doesn't know about it often become victim of it. They are called tax thieves. But the major problem arises in the case of company when employees get unexpected cash as bonus. They have to keep the record of every transaction made.

    - Payroll Providers Guelph