Paying taxes on time is one essential aspect of running a venture. You do not have to bear the burden of taxes when you have just started out as a business owner. Once you attain the target of the required revenue, you cannot deny your responsibility to pay taxes.
One of the vital taxes you have to manage will be corporation taxes. Thus, if you have a small business, you are responsible for paying it. Filing for taxes can be overwhelming as it involves some complex calculations and tasks.
Using the right form for tax filing is a crucial step. However, before that, you must get ready with the necessary financial statement. Like every tax season, you cannot do away with these documents.
Based on them, you can find out the deductions you can take. Why should you be honest and punctual when it comes to paying taxes? The reason is that it concerns the prosperity of your business.
When the tax aspect is perfect in your venture, the other things can be taken care of smoothly. You should consider it an obligation, or you will not handle it responsibly. It would be better to acquire cost-cutting skills so that the tax-paying process is smooth for you.
For example, at the time of getting loans, compare rates obtainable from different lenders. This way, you can ensure getting the best small business working capital loans that are pocket-friendly for you. In this manner, managing cash for tax payments will no longer be difficult.
Keep reading this blog to understand the different aspects of paying business taxes.
· How to pay the business taxes in effortless and simple ways?
You will be surprised to know how, as a business owner, you can try to optimise tax deductions. This will pave the way for less taxable income so that you do not have to owe a lot of money in this particular year.
Wondering what are the areas where you can try this out? It could be in the form of travel outgoings, business meals, vehicle use, or home or office expenses. You will get to know about some of the offbeat ways to reduce your tax bill in the later part of this blog.
Knowing the deadline to pay off the taxes is crucial, even in the case of running a business. At any cost, the last date should not be missed, or else it will incur some costs. If you are preparing for payment of corporation taxes, it is up to 9 months and 1 day after the accounting period ends.
The common ways you can pay for the business taxes are:
1. Online or phone banking
You can take advantage of the online banking facility to pay the taxes. Enter your credentials to log into the virtual banking interface. After that, you can follow the necessary steps to file for the business taxes.
If you do not have access to an online banking system, you can complete the payments through phone banking as well.
2. By visiting the bank branch
You can pay the taxes in the traditional ways by paying visiting to the bank as well. Find out accurate details about the working hours of the bank so that you can complete this work on time. It would be great if you have prior experience in completing some transactions through the bank.
3. Through direct debits
This will make sure that the payments happen automatically without your intervention. You must modify the settings of your bank account accordingly so that the amount debited from your account is within time. This facility also comes in handy when you have to repay financing options like business loans in the UK.
You do not have to remember about the payments separately. All you need to do is to keep the amount ready in the account before the deadline hits.
· Are there ways you can try to lower the tax?
While operating the business operations, you should constantly strive to find ways to reduce taxes. Now, you do not have to go out of the way for this, as this can be achieved with the help of the following steps.
§ Contribute to employer pension
Opting for providing an employer’s pension will lower the profit margin that is considered taxable. This will again help in reducing the business taxes you have to pay. Contributions towards pensions are one of the allowable payouts that can be utilised for tax relief.
You will be able to downsize the tax payment. At the same time, you can invest in safeguarding the future of your business.
§ Do not miss the allowable expenses
You have the right to claim as many allowable expenses as possible. This includes office supplies, salaries of the employees, costs related to travel etc. These outgoings should be subtracted from your business earnings.
This will automatically determine the amount of tax that you need to pay. You can prove all these things by keeping aside the necessary records or bills or receipts. Do not skip this tedious step, as it can help you downsize the amount that will be taxable for you.
§ Donate on charities
This can be a useful way to take advantage of tax reduction. You, as the business owner, can donate through sponsorship programs. The amount that you will donate will be deductible from your business profit.
· How do you file the business taxes?
This might seem like a hectic task, but you cannot compromise it. Just take note of the important points so that you are good to go with filing the small business taxes.
Ø Collect the important documents
You cannot go ahead and file taxes without some important documents. Thus, you should keep documents like tax records, paid bills, invoices and bank account statements. Do not miss out on other records like cancelled checks, sales slips, cash register tapes, year-end payroll reports, etc.
Ø Choose the right tax filing form
The tax forms are different for sole proprietorships, partnerships, corporations, and limited liability companies. Depending on the type of business you have, you must choose the correct form. Refer to the documents collected to fill out the form and submit it before the deadline arrives.
Ø Mark the tax deadlines in your mind
This is the deadline for completing and submitting the form without fail. Set reminders accordingly, as you cannot afford to miss tax payments. If the deadline for the payments coincides with a holiday or weekend, the next working day should be treated as the ultimate time limit.
Ø If needed, file for an extension
In some scenarios, you might need additional time to clear the payment for taxes. There is a designated file for this purpose. Fill it out accordingly before the due date arrives, or you will have to face penalties.
The bottom line
If filing for taxes seems daunting, you have to navigate it on your own. You cannot ignore it as you are responsible for paying business taxes on time. Please note that some ventures might be required to meet tax payments spread over the year.
You can pay quarterly taxes to lower the tax burden for a particular year. Missing one quarterly payment would mean compensating the same at the time of filing for the tax return.
