6 Ways to Reduce Your Tax Bill

There are numerous ways that accountants can assist businesses in reducing their tax bill and the company Accountant Melbourne offers services which helps businesses in this area. Six of the most common ways are listed below and will definitely help a business with their tax bill.

Claim deduction for prepaid expenses

It is possible for a small business to claim an instant deduction for different business expenses where the payment period covers 12 months or less and will terminate in the coming year. These expenses include rent, business travel, business subscriptions, insurances and lease payments. In order to receive the tax deduction for the present financial year, a business should be able to make the prepayment under the correct contractual agreement. Accountants will be able to make the right decisions on which expenses to claim deductions for.read more information about reducing your tax bills by clicking here

Make Superannuation Contributions

This is a retirement savings procedure and the Accountant Melbourne Company is able to offer services that can manage this contribution.

Defer Income & Capital Gains Tax

For those businesses that are cash based, one of the simplest tax planning strategy is to delay “receipt” of the income until after the financial year has ended. For the non-cash based businesses the delay of invoices will assist in reducing the tax bill.Accountants are also able to perform these tasks and help a business throughout.read more information about Income and deduction by visiting https://www.ato.gov.au/individuals/income-and-deductions/deductions-you-can-claim/

Write Off Bad Debts

Debts will have to be declared bad before the beginning of the new financial year in order for them to be written off as bad debts and the business has to show that it made a real effort to attempt recovery of the debt. A business can also re-claim the GST paid on debts that have been written-off as bad.

Give To Charity

Giving to charity is a simple way of lowering a business’ tax burden.Donating property and appreciated stock will a business to benefit two-fold. This will also allow you to avoid the capital again as well as claim a write-off of the asset that may even equal the market value.

Restructure Your Business

There are several business structures: partnership, S-Corporation, C-Corporation and LLC which affect the tax situation of a business. Accountants or tax professionals can give the necessary advice to businesses to help businesses decide which structure best suites them.

The money that is saved in taxes can be used in the re-investment or the business. Tax planning should be an essential part of all businesses whether small or big as this is a legal requirement for all businesses to continue operations. Accountants are a great help during this period as they are able to understand and evaluate best ways to help a business reduce its tax bill. Other ways to reduce tax bill include tax deductions and tax credits as well as stay current on the government laws and find the best experienced tax professionals. A business can also do tax-loss harvesting which can cut a business’ capital gains down to size.

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