No business should pay a lot of tax to the government during its first few trading years. That is because you need cash to grow the company, and you are entitled to spend a lot of money on expenses. In this post, we’ll show you some ideas you might like to use to decrease your payment next year. You still have a few months to spend the money before you have to hand it over to the government. So, now is the time to start using your profits wisely.
Treat your clients during business meetings
Maybe it’s time you started acting like a successful businessperson? Instead of meeting your clients at a fast food restaurant, you should take them to a more upmarket location. Look for five-star restaurants or even casinos in the cities you visit. One business owner treated our team to drinks and snacks during a visit to the MGM Casino, National Harbor last month. Perhaps you should look to do something just as extravagant? So long as you can justify the spending, you are fine.
Companies are allowed to invest their profits in new ventures. They can also invest them in existing firms and ideas. With that in mind, you should look into the possibility of following suit. Just take your time and get some good advice. You need to research any idea thoroughly before spending your money. However, it could be what your business needs to succeed. An extra income source in a few years time could make all the difference.
Improve your workplace
You are allowed to spend a lot of cash on improving your workplace. Perhaps it makes sense for you to move to bigger premises? Maybe you should invest some money in the latest computer systems. The basic rule of thumb is that it’s better to use your profit to pay for things that will benefit your business. Failure to do that could mean you hand thousands over to the IRS at the end of the year. That is not something you need to do while your company is still growing. Your accountant should be willing to offer more advice if you get stuck.
Another great way of reducing your tax bill involves increasing wages. There is no reason you can’t give everyone in the company a pay rise. That should help to eat up some of the profits you can’t spend through alternative means. Just be aware that you can’t decrease wages without inciting a backlash. So, you need to be confident that your business will continue at the same level. Otherwise, you might find yourself in financial trouble next year.
You should now have some great ideas. Just remember to run every purchase past your accountant. They will know how you can invest your money without making the IRS unhappy. Believe it or not, company directors are expected to have many expenses. So, you don’t have to spend all the cash on the business. If you’re smart, and you don’t overstep the line, you could spend some of it on yourself.