6 Small Business Tax Tips 

6 Small Business Tax Tips 

July 26, 2022

What are the small business tax tips?

  1. Make bookkeeping efficient 
  2. Research small business tax deductibles 
  3. Keep and register every receipt 
  4. Set up a separate business account
  5. Know the tax payment deadlines 
  6. Consult an accountant

As a small business owner, you likely started your business for benefits like independence, time flexibility, and bigger financial rewards, and not exactly because you are passionate about managing your taxes. 

Most small business owners have a lot to do and can easily lose track of filing their tax forms and paying their taxes on time. However, failing to do these civic duties can result in fines and audits — or in worst cases, criminal prosecution. 

Organization is the key to managing taxes. Make tax season stress-free for you by following these small business tax tips. 

Make bookkeeping efficient 

Efficient bookkeeping is one of the best tips to minimize small business tax stress. And with the wide range of accounting software available, there’s no reason for you to do your bookkeeping manually and leave room for error. 

Invest in accounting software that can track your expenses, income, invoices, and inventory. With all your financial records in one place, you can streamline your accounting while minimizing potential tax penalties. 

Research small business tax deductibles 

Every small-business owner needs to pay taxes. The exact tax amount may vary, however, it is still one of the bigger costs associated with running a business. That’s why as a small business owner, you might want to look at the potential tax deductibles. 

Here in the Philippines, the deductible expenses that can lower your tax pay include: 

  • ​​Advertising and Promotions
  • Amortizations
  • Accredited Charitable Contributions 
  • Communication, Light, and Water
  • Depreciation 
  • Fringe Benefits 
  • Fuel and Oil
  • Insurance
  • Janitorial and Messenger Services
  • Miscellaneous
  • Office Supplies
  • Rental 
  • Repairs and Maintenance 
  • Research and Development
  • Training and Seminar
  • Transportation and Travel

Just make sure to have the proper documentation for these deductibles to be valid. 

If you have accounting software, you can also have this step automated — doing so will make tax calculations easier.

Keep and register every receipt 

Keep and register every receipt 

Every year, small business owners have problems during tax season largely because they don’t have the proper documentation for their expenditures. 

Don’t get lazy about keeping and registering every receipt early on. Without carefully logged receipts, you might not qualify for valuable tax deductions, sacrificing money that could funnel back to your small business instead.  

Set up a separate business account

The first thing to do when starting a small business is to create separate bank accounts. This is because one of the easiest ways to get into tax trouble is to record personal expenses as business expenses. 

Personal and business expenses should be clearly divided also because it will be easier to claim tax deductibles — and support these claims in the case of an audit. Of course, having separate bank accounts can keep your personal transactions private as well.  

Know the tax payment deadlines 

Did you know that you can pay taxes on a quarterly or yearly basis in the Philippines? Know the tax payment deadlines to avoid getting penalized. Here in the Philippines, the payment deadline is on or before January 31 every year for those who pay taxes in full. However, for those who pay quarterly, the deadlines are as follows:  

  • 1st quarter: On or before March 31
  • 2nd quarter: On or before June 30
  • 3rd quarter: On or before September 30
  • 4th quarter: On or before December 31

Consult an accountant

If you’re feeling overwhelmed with your tax duties, it’s always a good idea to hire a tax professional. They can help you maximize your tax deductibles and avoid unnecessary penalty fees. 

But unlike large corporations, small businesses may not be able to afford hiring a full-time tax professional to do their tedious tax responsibilities. You can consult an accountant instead to put your mind at ease before the tax filing or payment deadline. You can also consult an accountant to get advice on how to improve your bookkeeping process. 

Key Takeaway

Follow these small business tax tips! The more on top of your business taxes you are, the more likely you can succeed. For more expert tax advice, you may get in touch with Benito Keh — one of the most prolific entrepreneurs in the Philippines!