| Here are seven ways for owners of small businesses | | | | your entertainment expenses to be business |
| to save | | | | related?5. Document Your Expenses Well: Do you |
| money on their taxes.1. Incorporate Yourself: If you`re | | | | document your |
| still a proprietor | | | | expenses well so that they would survive a tax |
| or partner of a business, it`s time to incorporate | | | | audit? |
| yourself. | | | | Have you kept a mileage log so that you can prove |
| Not only will you limit your liability, but you may enjoy | | | | the |
| lower tax rates on small business income and other | | | | percentage business use you claim for your vehicle? |
| tax | | | | Have you kept receipts for all your entertainment |
| advantages as well.2. Be Home Based: If possible, | | | | expenses |
| continue (or switch to) | | | | and listed the business purpose on the back of each |
| being a home based business. Not only will you keep | | | | receipt?6. Be Punctual: File all returns and pay all taxes |
| your | | | | due |
| overhead down, but you will be able to write-off (or | | | | (income, payroll, sales, et cetera) on time. This |
| deduct) | | | | way, you avoid expensive late filing (and payment) |
| the business use of your home.3. Income Split: Pay | | | | penalties and interest.7. Develop a Tax Planning |
| reasonable wages to your spouse and | | | | Mindset: Some people only worry |
| children. In this way, you can legally divert income | | | | about their taxes during tax season. However, you will |
| taxed | | | | save |
| at your higher rate to your family members that are in | | | | a fortune in taxes, legally, if you make tax planning |
| a | | | | your |
| lower tax bracket.4. Rearrange Your Affairs For | | | | year-round concern. Do you make business and |
| Maximum Tax Savings: Can you | | | | personal |
| make some changes to turn your hobby into a | | | | purchases, investments, and other expenditures with |
| moneymaking | | | | tax |
| business? Can you use that extra room in your house | | | | savings in mind?RESOURCE BOX:J. Stephen Pope, |
| as a | | | | President of Pope Consulting Inc., |
| home office for your business? Can you arrange to | | | | has been helping |
| use your | | | | clients to earn maximum business profits for over |
| car more for business purposes? Can you arrange | | | | twenty-five years. |
| for more of | | | | |