Simple tax savings tips for business owners;
Tip No 1:
Keep detailed records of all your transactions, anything from entertainment expenses (meetings at coffee shops) to travel expenses (flights and car travel) even gifts you might give clients to encourage more business, and then obvious common office expenses. This is a simple tax saving exercise that is often over looked. Give these records to your accountant to ensure SARS allows for deductions of the relevant expenses.
Tip No 2:
Your business is likely entitled to exemptions or relief. Your business might qualify as a micro business and only need to pay a single Turnover Tax, lowering your accounting and compliance costs. If you qualify as a Small Business Corporation you don’t pay tax on your first R78 750 taxable income. If your annual salaries are less than R500 000 per year, you don’t need to pay a Skills Development Levy. And there are many more exemptions. Make sure you chat to your accountant about these.
Tip No 3:
Claim expenses from your home – if you run a home office or your business from home. You can claim the interest on your bond as well as other day to day expenses such electricity and water There are limits of course, but there are many deductions SARS allows for.
Tip No 4:
File your returns and avoid penalties. This is a simple money saver, if you don’t file your returns SARS will charge you in penalties. If you file your returns on time you don’t get fines. We say it all the time at Q-tax, file your returns!
Tip No 5.
Hire a professional. SARS is actually a great ally for small business owners if you know how to navigate the legal channels they provide. It’s unlikely you can apply the knowledge and experience you have for your core business function to tax and tax planning. After a few months with us you’ll wonder why you even tried to do it on your own.
As always, give us a shout at firstname.lastname@example.org if you want to make sure you’re doing your taxes right.