Tax issues are not always easy to keep on top of. This is especially true if you work at home, and have many multiple income sources coming in from various different locations. If you bury your head in the sand, you can truly become disadvantaged when tax season rolls around. If you have a business, mismanagement of your finances at this time of year can truly make your day a difficult one to contend with, especially when the demand letters begin hitting your doorstep. If you’re not in the interest of asset seizures, then you should probably focus on working on your debt problems right this moment.
There are many great attitudes to keep regarding your tax responsibilities. We’re here to list them all, and hopefully help you get this most important of duties taken care of. If you’re a business owner, taking care of this can truly give you peace of mind, and can free up time for you to focus on the things that really matter to the overall success and health of your firm. If you’re a personal freelancer, then paying your way can help you make sure that all your books are balanced, and that you’re individually protected from being penalized.
Your taxes should be filed accurately, almost to a fault. You should know exactly the pennies being paid to the correct authorities. You should save all money into important tax-saving accounts so that you can pay the sums off on a monthly basis, and file at the end of the year with the perfect amount already calculated. If you’re a growing firm, it’s important to gain a reputable and well admired accountant to conduct your books for you from the outset. An accountant needs to understand the story of your firm, because one who can look at your books and truly help you with your paperwork will allow you to find places where you can potentially save tax.
That’s right, saving tax is a perfectly acceptable thing to do. If you’re entitled to claim, you should do so. This can sometimes help you offset the cost of your general tax requirements. For example, if you need to, click here to find a professional firm’s advice from the offset. This can help you make the best decisions to benefit your firm in the long run. After all, take care of the pennies, and you take care of the dollars. Being known as a responsible and well audited firm also looks positive from the books of the tax authorities too.
No one likes paying tax. That is the golden rule of income. Some of it will always find its way into the government’s pockets. If you want to live in a society, that is the price you pay. However, no matter how much you dislike being attentive to your tax aims, you must never neglect doing so. To act in this way is irresponsible, and can land you in some serious hot water. You should always consider systemizing your tax income. You have likely already pre-priced your products to factor in sales tax, but have you opened separate accounts dedicated to dividing up and saving money you earn from your tax incomes?
This is important if you’re on the individual level as a freelancer. Opening up a savings account can quite literally save you the headache of tax issues that occur as a result of incorrectly calculating them. Calculating your contributions with every paycheck you receive can quite literally help tax season seem like a friend to you, as opposed to something you must grimly carry out during the start of the new financial year.
Pay Your Tax
It’s sad to mention this, but breaking news stories about how tax is often funnelled through shell companies overseas might make a morally corrupt business leader feel like that is a safe way to save plenty of money. Don’t bother doing this. If you are caught, you can face potentially serious punitive costs. It’s also a pretty terrible thing to do to the society around you.
The country you live in only works when tax is paid. It’s the way infrastructure, government assistance and the military is funded, and so trying your best to shadily sneak out of this contribution redefines you as someone unworthy of running a business. It will also be no time at all until your practices are found out. It’s always best to put your money where your mouth is and truly work towards a better and more wholesome end, so be sure to keep your tax as a priority in your mind. Everyone, everyone, everyone must pay it.
Claim What You Can
To elucidate our previous point, it’s important to claim back what you can. This might be vehicular costs necessary for working towards your job, or generally being able to work from home from a computer. If you have a home office, you might be able to factor that in when claiming against working location costs. If you need specific equipment, you might be able to write off the tax required to purchase and maintain that item.
It’s for this reason that finding professional help is so important. They can help you find assets you can claim money back from that you might not have originally thought possible.
Mistakes To Avoid
Despite our previous advice, you should not claim on too many items. If it’s not warranted, it’s best not to try. For example, your food, drink and other freelance costs will not be redeemable if you’re factoring in home food – it’s usually only items consumed when outside on business than actually counts. Following this logic, only accommodation costs count when you’re outside and staying in hotels to facilitate your business meetings.
You should also neglect to claim tax on anything that tangles itself into your personal life. If you do this, you can find yourself in some serious hot water. It might feel tempting to do so, as the line is often blurred in the freelancer’s life. Still, it’s always best to be honest. That helps validate your story, and generally help you seem more authentic to the tax authorities.
With these tips, tax will transition from something to worry about to something you can handle impeccably.
*This is a contributed post