Tax time is here again. Get out your calculators, organize your receipts and take note. Here are some last-minute tips to help you minimize the pain.
Bad for Investors, Good for Taxes?
The bad news is that most investors are down big this year. The good news is that you can apply up to $3,000 of your losses to offset your taxable income AND carry forward any losses in excess of $3,000 for future tax years. Keep in mind, if your losses are in your 401k or IRA -- you cannot claim the $3,000 loss on your tax return. The credit is only available to you if you actually sold any of your investments.
Tax Breaks for Homeowners
There are three new provisions which could translate to a savings for homeowners. As you may recall, Congress passed a housing bailout bill this past July. If you recently purchased your home—within the last year—you may be eligible for a tax credit of up to $7,500. The credit was put in place to give new homeowners an extra helping hand with their mortgage.
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Showing posts with label Tax Services. Show all posts
Showing posts with label Tax Services. Show all posts
A new tax policy from the Treasury Department will let companies that take over banks hit by the mortgage crisis to write off more of the losses.
One estimate says it could save those firms up to $140 billion dollars in taxes. Private tax experts say in some cases, the tax breaks could exceed the cost of acquiring the banks. And they would come on top of the $700 billion government bailout.
Some members of Congress are upset that such a sweeping tax change was issued with no public hearings or congressional input. But the Treasury Department says it's just trying to give guidance to firms involved in bank takeovers at a time when numerous financial institutions are struggling, and their value can be difficult to determine.
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One estimate says it could save those firms up to $140 billion dollars in taxes. Private tax experts say in some cases, the tax breaks could exceed the cost of acquiring the banks. And they would come on top of the $700 billion government bailout.
Some members of Congress are upset that such a sweeping tax change was issued with no public hearings or congressional input. But the Treasury Department says it's just trying to give guidance to firms involved in bank takeovers at a time when numerous financial institutions are struggling, and their value can be difficult to determine.
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Taxes are one of the most important issues facing small and growing businesses. And like a company's profits, its annual tax bill will in part reflect the owner's skills and knowledge. Business owners need to be sure that they are meeting all of their responsibilities to the tax man -- and also seizing every opportunity to reduce their taxes. These tax tips will ensure Uncle Sam is not getting more than his due.
- Writing It Off: Deductions. Businesses can deduct all "ordinary and necessary" business expenses from their revenues to reduce their taxable income. Some deductions are obvious—expenditures in such areas as business travel, equipment, salaries, or rent. But the rules governing write-offs aren't always simple. Don't overlook these potential deductions:
- Business losses. Business losses can be deducted against a business owner's personal income to reduce taxes. If a business owner's losses exceed personal income for the year, some of the year's business losses can be used to reduce taxable income in future years.
- Trips that combine business and pleasure. If more than half of a business trip is devoted to business, deduct the traveling costs, as well as other business-related expenses.
- Employee Taxes. If a business has employees, a variety of taxes will have to be withheld from their salaries. Among them are:
- Withholding. Social Security (FICA), Medicare and federal and state income taxes must be withheld from employees' pay.
- Employer matching. Businesses must match the FICA and Medicare taxes and pay them along with employees.
- Withholding. Social Security (FICA), Medicare and federal and state income taxes must be withheld from employees' pay.
There are three primary reasons accounting is critical to the success of every business:
- Tax Planning
- Cash Flow Management
- Management Information
Lets go through each of them in the order above.
Tax Planning
How would you like to be the coach of a basketball team, but were not allowed to see the score, nor the statistics until the end of the game? Does it surprise you that many small business owners run their businesses this way?
Many small business owners just collect all their financial information in a box during the year. After the year is over, they will drop these on a tax preparer's desk, and hope the tax person can figure the assortment of papers out. The tax preparer then does his/her best to sort through the materials, and arrive at the information the IRS is looking for. Then a phone call to the wearied business owner will notify him/her of the damages.
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Tax Planning
How would you like to be the coach of a basketball team, but were not allowed to see the score, nor the statistics until the end of the game? Does it surprise you that many small business owners run their businesses this way?
Many small business owners just collect all their financial information in a box during the year. After the year is over, they will drop these on a tax preparer's desk, and hope the tax person can figure the assortment of papers out. The tax preparer then does his/her best to sort through the materials, and arrive at the information the IRS is looking for. Then a phone call to the wearied business owner will notify him/her of the damages.
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Net collections grew 32.5 per cent in the first six months of fiscal 2008-09.
Net direct tax collections grew 32.5 per cent in the first six months of fiscal 2008-09, slower than the 40 per cent growth in the same period last year, due to moderation in advance taxes paid by corporations and individuals.
Net direct tax collections (after refunds but before transfer of states’ share) stood at Rs 1,47,197 crore in July-September this year as compared with Rs 1,11,055 crore in the same period of 2007-08. This amounts to a year-on-year growth of 32.5 per cent.
Growth of corporation tax collections slowed to 35.65 per cent in the first six months of this fiscal as compared with 41 per cent in the same period last year. Similarly, growth of personal income tax (including fringe benefit tax, securities transaction tax and banking cash transaction tax) collections slowed to 27 per cent during the period, from 39 per cent in the same period last year.
“The moderation in direct tax collection growth in April-September is on account of lower growth in advance taxes paid by corporations and individuals,” said a revenue department official.
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Net direct tax collections grew 32.5 per cent in the first six months of fiscal 2008-09, slower than the 40 per cent growth in the same period last year, due to moderation in advance taxes paid by corporations and individuals.
Net direct tax collections (after refunds but before transfer of states’ share) stood at Rs 1,47,197 crore in July-September this year as compared with Rs 1,11,055 crore in the same period of 2007-08. This amounts to a year-on-year growth of 32.5 per cent.
Growth of corporation tax collections slowed to 35.65 per cent in the first six months of this fiscal as compared with 41 per cent in the same period last year. Similarly, growth of personal income tax (including fringe benefit tax, securities transaction tax and banking cash transaction tax) collections slowed to 27 per cent during the period, from 39 per cent in the same period last year.
“The moderation in direct tax collection growth in April-September is on account of lower growth in advance taxes paid by corporations and individuals,” said a revenue department official.
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Given what’s happened to the economy in the past few weeks — and the fallout that’s likely to continue between now and January — it’s tempting to take the economic and tax plans proposed by John McCain and Barack Obama and toss them both in the trash can.
After all, the plans were conceived and drafted for an economic reality that no longer exists. The political world in which they were imagined has changed dramatically as well, as have public attitudes toward business and government. Regardless of who wins the election, the next president of the United States will face a situation that few could have predicted a year ago and that even fewer fully comprehend even now.
Understandably, with barely four weeks left in the campaign and the economic situation in such flux, neither candidate has tried to go back and update his plan. However, those plans do tell us something about how the two candidates perceive the economy, where their values lie and how they would generally approach the challenges ahead.
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After all, the plans were conceived and drafted for an economic reality that no longer exists. The political world in which they were imagined has changed dramatically as well, as have public attitudes toward business and government. Regardless of who wins the election, the next president of the United States will face a situation that few could have predicted a year ago and that even fewer fully comprehend even now.
Understandably, with barely four weeks left in the campaign and the economic situation in such flux, neither candidate has tried to go back and update his plan. However, those plans do tell us something about how the two candidates perceive the economy, where their values lie and how they would generally approach the challenges ahead.
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What Kind Of Tax Advantages Do Home-Based Businesses Enjoy?
You have probably thought of many of the benefits of running your own successful accounting and bookkeeping service. From the independence of working for yourself to making better income than you may currently make, there are many reasons that starting a home-based business might be right for you. One consideration that you might not have taken into account is the tax advantages that you will enjoy with a business run out of your home. Let's explore these qualifying deductions, starting with the better-known ones.
The Home Office Deduction
The deduction that likely comes first to mind that home-based businesses can take advantage of is the "Home Office Deduction". The Home Office Deduction allows you to deduct some or all of the expenses of your office at home and related expenses.
To qualify for this deduction, your home office must be the principal place where your business is done. Secondly, the office space must be used exclusively for business use to qualify. For example, if you use your kitchen as your primary workspace, it is likely that you cannot take the home office deduction, assuming that you use it for personal use as well. To be on the safe side, set aside a room as your home office where possible. This will keep you on the safe side should the home office use ever come into question.
Detailed explanations of who qualifies for the Home Office deduction are defined in detail by the IRS themselves.
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You have probably thought of many of the benefits of running your own successful accounting and bookkeeping service. From the independence of working for yourself to making better income than you may currently make, there are many reasons that starting a home-based business might be right for you. One consideration that you might not have taken into account is the tax advantages that you will enjoy with a business run out of your home. Let's explore these qualifying deductions, starting with the better-known ones.
The Home Office Deduction
The deduction that likely comes first to mind that home-based businesses can take advantage of is the "Home Office Deduction". The Home Office Deduction allows you to deduct some or all of the expenses of your office at home and related expenses.
To qualify for this deduction, your home office must be the principal place where your business is done. Secondly, the office space must be used exclusively for business use to qualify. For example, if you use your kitchen as your primary workspace, it is likely that you cannot take the home office deduction, assuming that you use it for personal use as well. To be on the safe side, set aside a room as your home office where possible. This will keep you on the safe side should the home office use ever come into question.
Detailed explanations of who qualifies for the Home Office deduction are defined in detail by the IRS themselves.
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Tax Tips For Single People
- If there are going to be tax cuts in the next financial year, make sure you prepay membership fees for unions & professional associations and make any charitable donations before the end of this financial year (June 30)
- If you have a few $1000 in spare cash, don’t leave it in your transaction bank account earning no interest, instead put it in an Online Savings Account with a High Interest Rate and No Bank fees
- If you’re single and going to earn more than $100,000/year (from July 2008-June 2009) make sure you take out a basic private health insurance plan (with an Excess of $500 or less) or your Medicare levy will rise from 1.5% to 2.5%.
You may find the following tax tips useful.
- Stay informed
Rely on TaxCentral to provide you with the latest tax information. - Keep all your records
It has been a legal requirement for you to keep records of your income and expenses for tax purposes since April 1996. Did you realise that you must keep records for at least 22 months after the tax year to which they relate? - Do not pay too much tax
Is your employer deducting too much tax? Ensure that you are receiving your full pay entitlement using the payslip checker. - Fringe benefits may save you tax
Fringe benefits, such as a company car, can be a tax-efficient way of being paid rather than a salary increase. - Electronically file your tax return
Use Internet filing to complete, validate, calculate, and file your tax return for free. - Find a professional tax adviser
Trapped in your tax return? Professional tax advice can be found quickly and easily. - Choose growth over income
If you are a higher rate taxpayer, it may pay you to invest in schemes that generate growth rather than income. No tax is payable on capital growth while you hold an asset. Although you will incur a capital gain when you dispose of the investment, you can use your annual capital gains tax exemption to reduce the tax liability. - Maximise your pension entitlement
Use the pension calculator to see if you have any unused relief that can be contributed to your personal pension. - Do not forget stamp duty
Remember that you will be charged stamp duty on all purchases of property and shares. - Increase your tax knowledge...
...and then test yourself using the TaxCentral IQ test.
Rollbacks feel good in the short term. But factor in government spending, and the total tax bite is now at one of the highest levels in decades.
RHETORIC ABOUT TAX CUTS AND WHAT SEGMENT of society should get them is a predictable part of every presidential campaign.
As my colleague Jim McTague points out in the preceding story, that tradition is being upheld in the Obama-McCain clash. But while changes in tax rules are important because they can have a powerful short-term effect on an individual's finances, the modern history of U.S. taxation points to an unvarying truth: True long-term reductions don't exist for society as a whole. In fact, the total tax bite -- federal, state and local -- now stands at one of the highest levels in decades, despite the ostensible rollbacks of the Reagan and Bush years.
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RHETORIC ABOUT TAX CUTS AND WHAT SEGMENT of society should get them is a predictable part of every presidential campaign.
As my colleague Jim McTague points out in the preceding story, that tradition is being upheld in the Obama-McCain clash. But while changes in tax rules are important because they can have a powerful short-term effect on an individual's finances, the modern history of U.S. taxation points to an unvarying truth: True long-term reductions don't exist for society as a whole. In fact, the total tax bite -- federal, state and local -- now stands at one of the highest levels in decades, despite the ostensible rollbacks of the Reagan and Bush years.
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The taxation session is undoubtedly one of the most important sessions in anyone’s life. In fact, it is also an important season for each business organization because this is one time when they need to clear their tax dues to the government. The taxation session; therefore, tends to become a very important as well as hassle some if prior preparations are not made.
Making prior requirements for the tax paying session is necessary because this helps in avoiding any hassles when the real time comes. This is because if you as an individual or an enterprise manage to make late payments or manage to miss out on paying your tax on time, then there can be heavy penalties.
The one thing is for sure that making prior arrangements is not everyone’s cup of tea. It definitely needs to be handled by professionals who know their job well and can help you and your organization with all the accurate taxing details. Hence, in such cases, taking the help of the service of tax return outsourcing is one of the most convenient things to do because this can help you and your organization from facing any problems while the tax paying session is on.
Preparing the details of the tax that needs to be paid to the government and also the tax returns that are due from the government can definitely prove to be a huge task and only a professional, who can do these calculations at his fingertips can help you and your organization to avoid any problem that might have the chances of cropping up in the tax paying session. Companies specially hire people to pay off the taxes and to take care of the taxes and other similar expenses that are to be incurred by the company. However, today tax return outsourcing has gained a lot of importance and popularity because this is a more convenient option for any company.
As there are many firms that provide tax return outsourcing services to all kinds of businesses, it is important that a properly scrutinized research is conducted on the firms that provide these services. This is required because this helps in getting the apt services that are suitable for your firm and helps you to avoid any problem during the tax paying session. These professionals, who work in these firms that specialize in providing these services, are certified CPAs and they exactly know the things that they need to do in order to make the organization avoid any sort of problems in the tax paying session.
These professionals working in these firms take care of all the details that are related to tax payments of your organization, which include filing the data, creating track sheets and the various other details that are mandatory to take care of during the tax filing session. Therefore, now you just do not need to worry about the tax filing and tax paying session of your organization because with the help of tax return outsourcing all your troubles and problems can be easily avoided.
Michelle Barkley is a CPA who advises people on tax preparation and tax calculation. She specializes in Bookkeeping outsourcing, Outsourced accounting preparation, Tax return online, Income tax return outsourcing. To know more about Tax return outsourcing, Accounting outsourcing services and Outsourced accounting you can visit www.ifrworld.com.
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Making prior requirements for the tax paying session is necessary because this helps in avoiding any hassles when the real time comes. This is because if you as an individual or an enterprise manage to make late payments or manage to miss out on paying your tax on time, then there can be heavy penalties.
The one thing is for sure that making prior arrangements is not everyone’s cup of tea. It definitely needs to be handled by professionals who know their job well and can help you and your organization with all the accurate taxing details. Hence, in such cases, taking the help of the service of tax return outsourcing is one of the most convenient things to do because this can help you and your organization from facing any problems while the tax paying session is on.
Preparing the details of the tax that needs to be paid to the government and also the tax returns that are due from the government can definitely prove to be a huge task and only a professional, who can do these calculations at his fingertips can help you and your organization to avoid any problem that might have the chances of cropping up in the tax paying session. Companies specially hire people to pay off the taxes and to take care of the taxes and other similar expenses that are to be incurred by the company. However, today tax return outsourcing has gained a lot of importance and popularity because this is a more convenient option for any company.
As there are many firms that provide tax return outsourcing services to all kinds of businesses, it is important that a properly scrutinized research is conducted on the firms that provide these services. This is required because this helps in getting the apt services that are suitable for your firm and helps you to avoid any problem during the tax paying session. These professionals, who work in these firms that specialize in providing these services, are certified CPAs and they exactly know the things that they need to do in order to make the organization avoid any sort of problems in the tax paying session.
These professionals working in these firms take care of all the details that are related to tax payments of your organization, which include filing the data, creating track sheets and the various other details that are mandatory to take care of during the tax filing session. Therefore, now you just do not need to worry about the tax filing and tax paying session of your organization because with the help of tax return outsourcing all your troubles and problems can be easily avoided.
Michelle Barkley is a CPA who advises people on tax preparation and tax calculation. She specializes in Bookkeeping outsourcing, Outsourced accounting preparation, Tax return online, Income tax return outsourcing. To know more about Tax return outsourcing, Accounting outsourcing services and Outsourced accounting you can visit www.ifrworld.com.
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LIFE may be what you make it, but when it comes to tax returns it is more a case of making it up. This is an important point to remember with a Tax Office that invents ways to charge you for things that you didn't do, but might have. Here are some words that might have meant something, but don't.
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Technology and the ease of telecommunication have prompted more consultants, coaches, contractors and freelancers to take business matters into their own hands. Self-employment is no longer a means of making some extra money but a full-time career, and many such full-timers are punching their own time clocks and making excellent incomes.
The self-employed have unique tax concerns. Below are ten helpful tax tips to help lessen Uncle Sam's tax bite:
The self-employed have unique tax concerns. Below are ten helpful tax tips to help lessen Uncle Sam's tax bite:
- Keep very good records: Unlike a large company in which someone is hired to maintain records of all income and expenses, it is up to you to keep very good records, save all receipts and be able to support your deductions.
- Office space: Whether you have a separate office facility or are using a portion of your basement or a converted den, you can deduct the percentage of your home used exclusively for business purposes. Take this percentage off of your mortgage or rent payments as well as your utilities. If you have a phone exclusively used for business, deduct those phone bills.
- Don’t forget business expenses: Keep receipts and good records of business travel and other expenses including office supplies, postage and shipping costs, dues, subscriptions, and anything else business-related, including computer software for your business and upgrades to your system.
- Deduct child care costs: There are allowable deductions for daycare, nanny care, babysitting and any other type of childcare provided while you are working. Take the deductions allowable.
- Set up a retirement plan: You should consider setting up a self employed qualified retirement plan (i.e. SEP IRA) not only for tax purposes but for the same of saving money for your retirement years. If you wish to start with more than $2,000, you can opt for a Keogh plan, which allows you to put away more into tax-deferred savings for your retirement.
- Employ family members: You can deduct medical expenses for your entire family by employing them legitimately.
- Defer income if necessary: Being self-employed, you can alter your billing slightly to defer income if you see yourself heading into a higher tax bracket.
- Get money back from FICA: Being self-employed, you pay both the employer and employee portions of Social Security tax. You can, however, deduct half of these payments on your 1040 form.
- Increase expenses if necessary: Just as you can elect to defer income, if you see that your income is high, you can make many more year-end business purchases to add some tax deductions before December 31st.
- Get the right help: Look for tax help from someone who is familiar with self- employment, since your needs will differ from those of a company.
WE have a magnificent opportunity to reform the tax system. Not simply to make it better in general terms, but to design it specifically for the world emerging in this new century.
Now it's always a dangerous vanity to assume you can predict the future. But it's not unreasonable to suggest that China and its economic growth are going to be front and centre of developments over the next decade or two.
All sorts of developments. Whether we are thinking China as the benefactor continuing to enrich the "Lucky Country", or as the planet-killer turning our coal and iron ore into carbon. In more ways than one, it might be said: I have seen the future, on my TV last night.
I'd suggest we've never previously had the opportunity to see quite so, if you'll pardon the word in this context, clearly into the future before. And certainly not at those points in our history of great tax change.
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Now it's always a dangerous vanity to assume you can predict the future. But it's not unreasonable to suggest that China and its economic growth are going to be front and centre of developments over the next decade or two.
All sorts of developments. Whether we are thinking China as the benefactor continuing to enrich the "Lucky Country", or as the planet-killer turning our coal and iron ore into carbon. In more ways than one, it might be said: I have seen the future, on my TV last night.
I'd suggest we've never previously had the opportunity to see quite so, if you'll pardon the word in this context, clearly into the future before. And certainly not at those points in our history of great tax change.
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Chennai: Tax managers of corporates, who are supposed to look at strategic tax planning, are spending more of their time looking after the tacatical issues of tax compliance. The taxman has perhaps made these people behave differently?
One can look at the situation from two sides. Either, compliance standards have been put very high which require more resources, or corporates have been ignoring compliance issues. There is a third side too, the role of authorities enforcing compliance. What’s the solution? “A customised tax compliance solution to organisations based in India,” says Mr Bharat Parmar, Vice President (Business Development), BMR Managed Services, New Delhi.
But isn’t financial management and accounting in most large organisations managed though the specific modules of ERP systems, Business Line asked. Mr Parmar explained the shortcomings of the system. “Typically these systems are also leveraged by the organisations to help the tax team compute the tax liabilities and extract relevant information but since these applications are primarily financial and accounting solutions, they are not intrinsically capable and aligned when it pertains to the Indian tax compliance requirements.” To incorporate all of the requirements becomes complicated and cost-ineffective in the present systems, he added.
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Quebec among those singled out. Fast-growing, leading-edge sectors face undue burden because of micromanagement
Canadian governments are "whittling away" the gains to be had from recently reduced corporate taxes because of an attempt to micromanage their economies, and shift an undue amount of the business tax burden on fast-growing, leading-edge sectors, says a latest analysis of the country's tax policies.
The C.D. Howe Institute's latest report on Canadian tax policies, released yesterday, issued a stark warning to governments that pursue tax initiatives aimed at boosting the fortunes of "structurally declining industries," such as manufacturing and forestry. The provinces singled out for advocating such measures in their most recent budgets were Ontario, Manitoba and Quebec - which are among the highest-tax jurisdictions in the country, the think tank said.
These tax policies - such as accelerated writeoffs of capital equipment and sector-specific capital tax reductions - has led to what the think tank said was a "larger" distortion in the corporate tax system. As a result, fast-growing, knowledge-based industries, which are seen as key to future economic growth, face much higher taxes on business investment than elsewhere and compared with other industrial sectors.
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Canadian governments are "whittling away" the gains to be had from recently reduced corporate taxes because of an attempt to micromanage their economies, and shift an undue amount of the business tax burden on fast-growing, leading-edge sectors, says a latest analysis of the country's tax policies.
The C.D. Howe Institute's latest report on Canadian tax policies, released yesterday, issued a stark warning to governments that pursue tax initiatives aimed at boosting the fortunes of "structurally declining industries," such as manufacturing and forestry. The provinces singled out for advocating such measures in their most recent budgets were Ontario, Manitoba and Quebec - which are among the highest-tax jurisdictions in the country, the think tank said.
These tax policies - such as accelerated writeoffs of capital equipment and sector-specific capital tax reductions - has led to what the think tank said was a "larger" distortion in the corporate tax system. As a result, fast-growing, knowledge-based industries, which are seen as key to future economic growth, face much higher taxes on business investment than elsewhere and compared with other industrial sectors.
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ROME, June 25 (Reuters) - The Italian government has banned energy firms from passing on a new tax to their customers, the text of the law showed on Wednesday.
Economy Minister Giulio Tremonti has dubbed his hiking of the main tax on company profits (IRES) to 33 percent from 27.5 percent as a "Robin Hood" tax as the extra revenues will be taken from wealthy companies and spent on the needy.
Energy companies initially protested but have since played down the impact of the tax. Fulvio Conti, chief executive of power utility Enel (ENEI.MI: Quote, Profile, Research) said the tax would be "easily absorbed" by his group.
Media had speculated that the tax on oil, gas and electricity companies, would mean an extra burden to consumers already facing higher costs due to rising oil prices.
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Economy Minister Giulio Tremonti has dubbed his hiking of the main tax on company profits (IRES) to 33 percent from 27.5 percent as a "Robin Hood" tax as the extra revenues will be taken from wealthy companies and spent on the needy.
Energy companies initially protested but have since played down the impact of the tax. Fulvio Conti, chief executive of power utility Enel (ENEI.MI: Quote, Profile, Research) said the tax would be "easily absorbed" by his group.
Media had speculated that the tax on oil, gas and electricity companies, would mean an extra burden to consumers already facing higher costs due to rising oil prices.
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While government-to-the-rescue programs may ease some of today’s problems, they may worsen the situation in the long run, particularly when lawmakers raise taxes to pay for the programs.
The Conference Boards Consumer Confidence Index declined in June to just 50 percent, its lowest level in 16 years and about half of what it was a year ago. That’s not surprising given rising food costs, skyrocketing oil prices and home mortgage troubles.
It’s tempting in such situations for voters to demand action from Washington. And the pols usually are only too willing to oblige. Even now Congress is debating a $300 billion housing bill to bail out Americans unable to make their mortgage payments.
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The Conference Boards Consumer Confidence Index declined in June to just 50 percent, its lowest level in 16 years and about half of what it was a year ago. That’s not surprising given rising food costs, skyrocketing oil prices and home mortgage troubles.
It’s tempting in such situations for voters to demand action from Washington. And the pols usually are only too willing to oblige. Even now Congress is debating a $300 billion housing bill to bail out Americans unable to make their mortgage payments.
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The 2008-09 tax season is almost upon us and entrepreneurs can expect to get some extra scrutiny this year. SmartCompany has asked a panel of tax experts for their best tips and the best action you can take now to minimise your tax bill
The Federal Government has given the taxman an extra $257 million over the next four years to increase its scrutiny of businesses – it expects to collect an extra $1.98 billion for its efforts.
All this means you need to have your tax affairs in good order if you want to avoid angering the taxman, and claim as many deductions as possible. To help you, SmartCompany has spoken a panel of tax experts to get their top tips from a business and personal tax point of view.
Every dollar you can save is another dollar to reinvest in your business, or pay for that well-deserved holiday.
Before we start, there are two very important bits of advice that every successful entrepreneur should follow.
PricewaterhouseCoopers partner Paul Brassil says his best tip for entrepreneurs is to spend more time finding the right tax adviser. “Find someone you really like working with, and who has strong technical backup in people and resources. Too often people muddle along with an adviser from the distant past, without recognising that the needs of a growing business include upgrading the level of advice they receive.”
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The Federal Government has given the taxman an extra $257 million over the next four years to increase its scrutiny of businesses – it expects to collect an extra $1.98 billion for its efforts.
All this means you need to have your tax affairs in good order if you want to avoid angering the taxman, and claim as many deductions as possible. To help you, SmartCompany has spoken a panel of tax experts to get their top tips from a business and personal tax point of view.
Every dollar you can save is another dollar to reinvest in your business, or pay for that well-deserved holiday.
Before we start, there are two very important bits of advice that every successful entrepreneur should follow.
PricewaterhouseCoopers partner Paul Brassil says his best tip for entrepreneurs is to spend more time finding the right tax adviser. “Find someone you really like working with, and who has strong technical backup in people and resources. Too often people muddle along with an adviser from the distant past, without recognising that the needs of a growing business include upgrading the level of advice they receive.”
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NEW DELHI: Brace up for a call from the Income Tax (I-T) department if you are not filing your returns every year. This time, taxmen have an express instruction from the government to drag you to courts, if the need so arises, to ensure compliance.
With Finance Minister P Chidambaram hopeful of collecting an ambitious Rs 4 lakh crore in direct taxes in the current financial year, the authorities have been instructed to take up as many surveys as possible besides conducting raids on suspect big evaders to meet the target. Soon after inaugurating the two-day conference of chief commissioners and directors-general of Income Tax on June 9, Chidambaram had said that the department had already taken up 15 cases of 'non-filer' (those who have never filed a return) and 'stop-filer' (those who have stopped filing returns) for prosecution.
Hinting at stern action against wilful evaders, the FM had announced that a general direction had been given to taxmen that if during a survey or a search a person is found that he had never filed a return (non-filer) or has stopped filing return (stop-filer) in the last three years, steps must be taken for his prosecution. According to existing provisions of the I-T Act, failure to file returns may land a person in prison for a term extending up to seven years in case he is found to have evaded tax of more than Rs 1 lakh, or a penalty of Rs 5,000 for those on whom tax dues are found but returns are not filed.
Though the law on filing mandatory returns has been in existence for a long time, the very reiteration of the fact indicates the government's intention to invoke its provisions to catch wilful evaders.
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