Tax planning is a very important task for any business. When you work from home, however, it’s very easy to miss out on important tax details. I mean, it makes sense. You’re constantly working on a variety of tasks, and your financial knowledge isn’t all that great in the first place. How are you supposed to know the different tips and tricks to help you make the most of your tax requirements? Well, we can start to help you with that. We’ve put together a list of ten things that might just save you a lot of money in the future.
Organisational Day-To-Day Planning
If you want to keep track of everything to do with tax, you need to be organised in the first instance. If you’re finding those financial matters too difficult to manage, you need to rearrange your priorities. You’ll only stay on top of things if you can put together an organisational structure. Be aware that there are many tax tips and tricks that go into much more detail than we can mention today, too. Business advisers are the people who can help you save even more money if you want to go down that route.
Home Utilities
Think of all the utilities in the home that you use for business purposes. What about the heating? I mean, you need that to simply carry out your work in comfort. You can also get tax deductions on your electricity as you’ll undoubtedly be using a lot of it on a daily basis. It’s important to put all of these considerations together before you go doing your tax return. Keep a running track of this information, too. Noting it in a diary is a good way to go.
Equipment Deductions
The same thing goes for the masses of equipment that you’re using in the home. Laptops and computers are a good start. There’s the office table, which will undoubtedly break and need to be repaired in the future, too. In fact, why not upgrade your office entirely? Everything that you decide to purchase for business needs can be used to claim deductions from tax. The amount you’ll get will vary, and you might want to speak to a financial professional about this.
Service Costs
Another great way of saving money is to think about the services you’re using in your home. I bet you’ve got broadband, right? How much time do you spend using that internet connection for work purposes? It’s probably a lot. Also, your landline phone contract falls under the same category, as does anything else you’re contracted to. You won’t get full deductions unless you’re using them entirely for business purposes, but you’ll still save money!
Travel Expenses
Another way you can save on tax is to deduct any travel expenses you may incur for work purposes. For example, you might have to travel to an event, or attend a meeting out of town. Everything you do needs to be documented, and receipts should be kept for any expenditure you make. It makes the tax return process a heck of a lot easier if you’ve got the documentation to prove how much travelling you’ve been doing.
Have You Got A Retirement Plan?
Retirement plans for self-employed people work a little differently to how they would for a normal, employed worker. Again, this is where you’ll probably want to seek additional advice from experts in the field. Ultimately, a tax-deferred retirement plan can help you to save money and lower your taxes. You might be thinking in the present right now, but you need to start thinking about the future at some point.
Document Everything You Do
We’ve mentioned this vaguely in many of the points above, but let’s go into a bit more depth. It’s imperative that you document everything you do when it comes to taxes. You need all that evidence to prove why deductions should take place, for example. It also helps to make the otherwise complicated tax return process much easier to deal with. Get a diary or a basic notebook and start writing everything down.
What’s Your Business Type?
If you’re a normal, self-employed home worker, you’ll have probably gotten to grips with the tax process by now. But, if you’re able to form a corporation, for example, you might be able to save taxes in the long run. Again, this is not a simple decision to make, and you need assistance if you’re going to make a big leap such as this.
What About The Mortgage/Rent?
Well, if you’re wondering about your deduction in costs in this area, I’ve got some good news for you. You might be able to receive tax reductions for your living costs, dependent on how much of the home is used for business purposes. For example, if you’re using one room in a 10-room house, you might be able to claim around 10%. Oh, and in Australia, you have to pass the Australian Tax Office’s interest deductibility test, first. Otherwise, you won’t be allowed to claim deductions for your mortgage/rent costs.
Prepare Your Tax Return Ahead Of Time
When it comes to completing your tax return, you’ll soon find that preparation is key if you want to be successful. You want to be ahead of the game by the time that tax return deadline rolls around. Believe me – it’s important! Waiting until the last minute puts you under pressure, and increases the risk of you making serious mistakes. If you want to be in the best position to start saving money and getting the deductions you deserve, don’t leave it until the last second!
We’ve taken this opportunity to go through the basics of home business tax tips. There are much more advanced tricks that can you help you to save even more money in the long-run, however. You’ll have to search a little further to find them, but for now, focus on getting your head around the ones we’ve mentioned.
Good Luck!
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