As a startup entrepreneur or CEO, you would only want to concentrate about your business. This means that you do not want other distractions to arise, which can take the focus away from your company. This is an ideal scenario, which almost all of us desire for our new company.
However, there are many legal and governmental regulations, which can act as impediments. This means that you will find yourself dealing with many diverse areas, apart from your company.
In a recent study conducted, it was found that taxations, licenses, etc. are among the top areas, which entrepreneurs feel drain their time and resources.
In this article, we are going to look at one critical area- Taxation! We are also going to share with you some taxation tips, which can help you grow your business. Always remember one thing, when it comes to taxes, every tax saved is every revenue added!
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Why Startups need to concentrate on Taxes?
When starting a new company, there are so many important areas, which need your focus. From perfecting the product or service to hiring employees, to advertising and marketing, all these areas are essential for your focus.
In addition to them, you would need to talk to different vendors, banking and financial institutions and so on. However, most startups avoid taking their taxes seriously. This can have grave implications for your immediate future. Taxes are inextricably intertwined with your permits and licenses.
This means that when you start your company, you have to get the registration done, the licensing required and other relevant governmental paperwork. If you are engaging in tax evasion, or simply forgetting about the filing periods, your company not only stands the risk of being fined, but also losing its licenses and permits.
This is why it is important for startup owners and CEOs to pay due attention to their taxes, structures, mode of payments and other paperwork.
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Top 5 Tax Tips to help you Save Millions of Dollars: The List
- Decide about the nature of the Company at the very outset-
When starting out, most entrepreneurs opt for a LLC based model. The reasons for the same are obvious. It is less cumbersome, the paperwork is easy and you can get up and running quickly. However, when you will be approaching investors for capital investments, you will find that they prefer a corporation. This means that the tax structures, processes are all going to be different.
- Keep your Personal Expenditure completely separate-
You are the owner of the business, but the company should always have its own independent financial identity. This is why it is best to keep your expenditure account separate from that of the company. Most successful startup owners draw a set salary from the company every month, without touching the company expenditure. This is a good practice to help you stay out of problems and legal loopholes.
- Time is of the essence when it comes to Filing Taxes-
Any business has to take care of filing taxes; this means you need to focus on sales tax filing, income tax and employee PF and health benefits. It is always better to do the same within the stipulated period. This not only attracts penalties but also enables you to present a good picture in front of banks and investors. Filing taxes on time is a great money saving technique.
- Work with experienced Tax Professionals-
No one likes to spend hours and weeks decoding the tax laws, filing norms and other details. This is why it is essential you seek help from professional tax experts. They can get the same done for you in a hassle-free manner. This will enable you more free time, which you can then dedicate towards important aspects of the business.
- Document all your Tax Paperwork and be aware of Perks and Benefits-
Maintaining all your paperwork in order is something most of us ignore, However, we do we feel the need for it when an emergency arises. As a business owner, you also need to be aware of all the tax rewards and benefits, which almost states in the country offer to small businesses. Knowing about them can help you save a lot of money in taxes over a period.
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Conclusion
Taxes constitute a very important aspect of any business’ core functioning. It not only help you maintain a good image of your company, but also keeps you out of governmental problems and legal regulation issues. By following the above-mentioned five points, you can help your company always stay ahead of tax related problems.