Continuing from our last article, today we will discuss another 4 Business Accounting, Tax and Legal tips for any small business, which may be used when getting your business finances in a gear during the year:
Vehicle and Travel Expenses.
Most likely you are using your family vehicle as your mode of transport to and from your clients when you have meetings to attend. Do you account for all gas fills you made during the month? I suppose not because most entrepreneurs I speak with do not keep these bills, they always throw them away.
On the other hand, you may not own a vehicle, you may travel via public transportation. You need to keep track of your traveling fares to and from your clients or meetings and tally it up at the end of the month.
It is also important to take account of your vehicle repairs such as tyres changes, even radiator rebuild or even a total paint job of the old faithful vehicle which serves you so good for your business and your family.
So you go out with a potential new client for brunch or even lunch. You can only deduct 75% off the entertainment bill, not the whole thing. For example, You go to lunch with a client, the bill came to $100 including tips and taxes, you can also deduct $75 as your business expenses. At the back of the bill put the client's name so you can use it for reference in the future.
Upgrading the home office.
You are in business for a little while, so you decide to upgrade the piece of office which you are sharing just off your family living area. You have to save extra funds to be able to build 10 feet * 12 feet room equaling to 120 sqft of office space.
You purchase a new desk, office chair, filing cabinet, waiting chairs, bookcase, and many other items that can all be deducted in your business.
If you do not have any intention to bring clients to your home office, I suggested you don't spend too much money on your home office.
It is important to have health insurance but as a sole trader or partnership, insurance business usually sees this type of business as a risk. I will suggest doing some research until you find an insurance package which suits all your business needs.
Important to note, you cannot deduct health insurance as an expense through your spouse or partner's health insurance at their place of work.
Next week, we will discuss another four tips.