Tax is probably the scariest word in the world of business. No business can continue if you do not pay tax. It is a must that you complete tax calculations very much in advance. Prepare yourself to pay your tax bills on time. It is a good habit to pay your business taxes within the given time, the more you delay, it can lead to other problems. A particular tax amount may never appear small to a business, unless you plan in advance.
Q. Aren’t you paying your taxes on time?
Here are some tips from Kuza Biashara, on how small is small when it comes to tax:
How to calculate tax
Don’t wait till the last minute; always make it a point to calculate your tax amount very much in advance. Once you calculate your tax, check your finances first. After you check, go to a tax consultant and check with them if you can reduce your taxes by any other way. For sure the tax consultant will help you in some way or the other. They will also tell you how you can pay your tax in installments as three to four quarters in a year. This will be a relief to you as you can handle your finances smoothly even if they are tight. No amount of business tax is small to any business, but completing tax calculations very much in advance will help the amount appear smaller.
Keep a track of expenditure and cash flow
In a business it is very crucial that you know your basics first. One should know every minute detail regarding the expenditure and cash flow. Understand where you are investing, how much you are gaining back and what are your profits. Before you get to know what your tax amount is, you need to know your earnings and profits. Business tax is based on the amount of money you make in an annual year. The more you make the more will be your taxes. The lesser you make, lesser will be your business taxes. Do not blow your profits, chalk out a plan and then use the money accordingly.
Maintenance of records
Apart from keeping a track of your expenses and cash flow, you need to maintain proof of every little detail. Proper records have to be maintained by your company, while you pay business taxes. These act as proof for your business. Every single receipt you give your customers should also be retained with you. Stack all your receipts separately and do not lose them. Maintain your data in computers as well as in books, it is a good way of having back up. It is a must that you maintain data without any errors and it should be updated every day to avoid confusions.
Tax plays a very vital role irrespective of the scalability of the business. A proper Tax Planning will ease your burden of paying huge tax amounts or penalties. Keeping a track of all the expenditures & cash flow, having your business accounts in place are all a part of proper tax planning.