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Guidelines for Startup Business about Tax

A businessman’s life can be overwhelming at times especially in terms of tax matters like corporate tax filings and accounting. If you’re currently an owner of a startup business, perhaps you are wondering whether you are excessively paying for tax or you have missed any deductions. For you to know more about that, check out the tax tips for startup businesses from the trusted and certified NW Melbourne accountants

A lot of owners of startup businesses does not know that they can claim a part of their household costs once they operate from home and meet any of the conditions below: 

  • You utilize the work area just to know to accumulate your employment income. Apart from that, you need to utilize it continually and regularly for customers, clients, or other people during your employment duties.  
  • Your workspace is where you basically do your work (more than 50 percent of the time). 

Such household costs involve mortgage interest, home insurance, property tax, utilities, and rent. Though you cannot entirely claim such expenses, claiming a portion can still help you save tons when tax time comes.  

Take advantage of tax credits 

Startup brands can be operating business normally without even realizing that they can access tax credits that can actually aid the business to reduce their taxes. At times, such credits are just available when an election is filed. If you don’t know about this, make sure to ask your trusted accountant and know how you can take advantage of this.  

Split income with family members 

Paying children or spouses a reasonable wage or salary from startup businesses is deductible. Reasonable is the keyword here—the salary paid needs to compensate the family member equally for the number of services or work given to the startup business. This can minimize the tax bill of the household if compared to paying all the salary to the owner of the startup business.  

Have your dividend/salary mix correct 

The owner of small businesses can be reimbursed by getting a dividend, being paid a salary, or a combination of both. All options have their own disadvantages and disadvantages. The solution for this would be to know what combination can maximize the earnings of an individual shareholder. Knowing the right mix could be complex and puzzling. Hence, it would be best to consult a certified accountant to let you know how to have the right mix balance of your dividend/salary.  

Buy capital assets at year-end 

Businesses will need capital assets like leasehold improvements, computer software, and hardware, equipment, furniture. When equipment requires to be bought, or when you need to improve your business leasehold, these need to be done towards the year-end as much as possible. If you do this, the business can request a depreciation for the entire year even if the assets were still utilized for a few months or weeks.  

If you’re still starting with your business, this is a great guideline you can consider practicing and see yourself later on as a successful businessman.