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Two things are certain in life: death and taxes. The famous quote by Benjamin Franklin is applicable to everyone unless you are in the business industry. Yes, as it turns out, your business can avoid taxes and it can do it legally. Obviously this revelation is a huge deal because cutting your taxes will save you a fortune not to mention a lot of time. So what are you waiting for? Your taxes won’t cut themselves in half.
A 1031 Exchange
If you like real estate you might already know about the 1031 exchange rule already. If you don’t there is no need to worry because you can learn about it now. In basic terms it is a rule that prevents people and businesses from paying capital gains tax. Even more important is the fact that you can include other business assets. One last benefit – you don’t need to do it alone. The good news is that the industry is filled with companies like Triple Net that can provide help. The result is that you can avoid tax on everything from your office space to office equipment and company cars.
Claim Expenses
The government isn’t a monster that wants to take all of your money. They do want a cut, a cut that they think they deserve, but they also provide you with exemptions. Claiming expenses is probably the easiest and most well-known tax exemption at your disposal. All you have to do is figure out what your business uses that you can claim back and keep a record. And in this case ‘record’ means a detailed record. They are happy to give you the exemption but only if you are eligible. If they find that you aren’t they will hit you with a fine or a jail sentence.
Pay Into A Retirement Plan
The state doesn’t want everyone on their books when they retire. Instead they want them to be self-sufficient so they can save a lot of money. It is for this reason pension plans are tax-free and why you should take advantage. As an individual you can take your business’ profits and shelter them in a retirement plan especially if your business is profitable. Or you can create an employee retirement opportunity. As long as it is the business’ money that is going into the plan you won’t have to fork out for taxes.
Keep Up With The Law
Tax is a complex and intricate problem that is always changing. Even though it is hard you have to try and keep up if you want to take advantage. Not to mention that using out of date tax measures is dangerous. If you aren’t up to the job there is plenty of accountants with the expertise and experience to guide you through the process.
The above is legal and will save your business money. All you have to do is implement it into your business strategy.
Ugh. Taxes aren’t fun, are they? We don’t desire to learn about them, but unfortunately, we all have to. Part of being a business owner is learning how to manage taxes correctly to avoid any potential problems. If you don’t understand what you’re doing, you might neglect important taxes or even pay over the odds when you don’t need to. It’s an important bit of knowledge to have, so we’re just going to scratch the surface of it today for you. We can’t go into specifics of all taxes in every country, so let’s talk about some general things that you need to know.
Taxes aren’t going to go away. It’s going to benefit you to learn everything you can about them before you get started with a small business. Plan ahead and forecast with taxes in mind so that you don’t have any nasty surprises down the road. You may have to think about things like self-employment tax, payroll taxes, and many others. You certainly don’t need to be an expert in these things, but having a basic knowledge will benefit you as you’re starting up.
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So, you might be wondering why it’s so important to know business taxes inside out. I mean, you could always outsource those responsibilities to an accountant, right? Well, that’s certainly one way to do it. If you don’t have the time to learn this stuff, you can pay a bit more money to get that kind of assistance. However, outsourcing comes with its own pitfalls that you need to be aware of. Whatever you do, hire someone that is reputable! By hiring the cheaper option with too-good-to-be-true promises, you could end up drawing the attention of the IRS very easily.
Another reason it’s important to be informed is that you could face issues down the road. For example, you might be taxed the wrong amounts, and you need to be able to spot that. Without the proper knowledge, you’ll just be looking at figures on a piece of paper, and potentially throwing away a lot of money. If you do get into tax disputes, you’re going to need a tax attorney. You shouldn’t be getting into tax disputes without having the experts around you to advise. It doesn’t matter what extent the dispute is; it’s worth pursuing if you think you’re paying too much money.
Let’s wrap this up. Taxes aren’t as bad as they seem when you’re first learning about them. It’ll take some time to understand them properly, but that knowledge will come in handy for the rest of your working career. You can find guides all over the internet or in bookshops to help you get started. Take a bit of time now to get your head around them, and utilize expert help when you’re struggling. Finally, talk to friends and family about their experiences with taxes for additional help. You’ll have a great starting point for financial security if you know what you’re doing in this area. So, get out there and get your business off to a great start!
