Owning and running your own small business takes a great deal of time and sacrifice on your part to make it all work. Gone are the days of being able to work from 9 to 5 and having your weekends off because when you own your own business, your time is no longer your own and you have to commit all of it into your new business to help it succeed and to still be operational in 2 to 3 years from now. It is likely that all of your time will be spent making it a complete success and this means that you might overlook many other important things like paying your taxes for example.
You could take advantage of the very popular salary sacrifice and if you are unfamiliar with what this is then you should know that it is a service put in place to allow you to enjoy tax savings that are incredibly convenient and are at a minimal cost to you. These excellent service providers will work alongside your employer to create a new structure for your salary payments so that you can pay off your expenses before tax and this helps to reduce your overall taxable income. This is just one way to reduce your taxable every single year and the following are some others.
- Put away money for retirement – You might already be a pretty young individual and so you’ve never really thought about starting to put money away for your retirement in 45 years from now but there are many tax advantages to starting to save for your retirement now and this allows you to pay a lot more of your income as your employee contribution and so all of this helps to lower your overall tax bill.
- Use your car as a business expense –It is highly likely that you will need to use your vehicle to drive to work and back home again as well is using it to visit prospective clients all around your local town or city. This means it you are using your car for work and this will result in lower taxes being paid because you will be using things like fuel payments as deductions.
- You can claim depreciation expenses –All businesses have some kind of essential equipment that they need for their small business to function properly and like everything else in life, these same pieces of equipment will get older and they will begin to present problems. This means that their value will go down and you can offset some of your income by using this equipment reduction in value over its life time.
These are three legitimate ways to reduce your tax burden and they are all within the confines of Australian tax law. You need to do whatever you can to make your business a success and so trying to save your money here and there by taking advantage of tax breaks, is one way to make sure that you are still operating 5 to 10 years from now.