There are only two things that are certain in life: death and taxes. How many times have you heard that saying before? Chances are, you’ve heard that statement at least twice in your life. The reason people repeat it so often is because it is the absolute truth. Death and taxes are unavoidable. You have to deal with them. The good news is that taxes don’t have to surprise you or pack a massive and crippling punch. If you own a business, you can manage your business in such a way that you not only minimize your taxes but you also increase your business’ ability to make more money. By pursuing a clear and focused strategy, you can run your business in a way that minimizes the taxman’s take while taking your company to a whole new level. Keep the following in mind.
Begin the Year with Tax Management in Mind
If you want to save on taxes come tax time while working to take your business to a higher level, don’t expect this to happen automatically. Don’t expect this to happen all of a sudden. Least of all, don’t expect to get lucky. It takes serious planning to pull this off. Saving money on taxes doesn’t just happen. Left to themselves, tax authorities will try to saddle you with as many taxes as possible. Don’t be surprised. That is their job. There is, however, a lot you can do about this situation. You can plan your fiscal year with tax reduction in mind. At the start of the year, start with a solid plan. Read the points raised below and add them to your business operations and management plan for the coming year.
Aggressive Spending means substantial tax write-offs
The tax code is structured in such a way that the government only taxes what’s left after a company deducts its expenses from its revenues. So, the more expenses you have, the less adjusted income your company has. Your company is taxed based on what is leftover. If you are serious about saving money on taxes, it is very important that you increase your expenses. This is the core of saving money on taxes while positioning your business for further revenue growth. The less leftover, the fewer taxes you pay because tax authorities follow a graduated system. There is a minimum income level that doesn’t get taxed at all. There’s a higher income level that gets taxed and the rate goes up as your company’s income goes up. This keeps going up until you hit the maximum tax rate. The key to saving money on taxes is to make sure you have a very little leftover. After all, 32% of nothing is, you guessed it, nothing. Keep in mind that this doesn’t mean you don’t make any money. You still make money but you don’t make enough taxable income to get slapped with a high tax rate.