> > Small Business Assets |
Small Business Assets
Are you a small business owner looking for new ways of cutting your taxes? While your tax advisor will probably suggest a whole range of investment vehicles such as mutual funds or the latest IRA, how many will tell you to take a long, hard look at your small business assets? Most government tax authorities will base tax assessments to small businesses based upon the original book value of those assets. In many cases, you may even have been paying taxes on those assets even if you no longer use them. By stating the current condition of those assets, they can then be written off your taxable item schedule, thereby making significant savings against your tax obligations. Be strict, and start making fixed asset schedules, keeping track of all assets that your business currently owns. When you’ve finished making your asset inventory, all items that you can no longer find should be written off. You have now saved yourself on future taxes by reducing the total number of assets that you have to report to the authorities. With an updated asset schedule, you will also have a good benchmark against which to measure future asset purchases.
If you have a good tax advisor, they will be worth their fees if they keep in check those expenditures that appear to be deductible, but which in fact turn out to be depreciable fixed assets. The rule of thumb is that if the expenditure is needed to maintain the existence of a particular asset in good, working condition, then it can be considered as an expense. However, if the expenditure extends the life of the asset, then that expense should be amortized over time.
Owners of small businesses should also note that any capital value gain that arises from the sale of any of your assets are exempt from Capital Gains Tax (CGT) up to the sum of 500,000 USD, where those resultant funds are invested in retirement. This is a lifetime limit, and along with the small business CGT exemption of 15 years, it recognizes that those reinvested funds need to be ploughed back into their businesses. This makes life difficult for small business owners who are pulled in two different directions being unsure where to invest the proceeds of those tax savings. As with all tax-related matters, the best advice would be to consult a qualified tax adviser who will be up-to-date with the latest regulations.
For more infomation on tax savings choose from the list below. |
|
|
|
|
|
|
Banking - Business Finances - Economics - Insurance - Investing
Major Purchases - Personal Finances - Stock Market - Taxes
|
