25 Ways to Reduce Your Tax Burden as a Small Business in the Philippines

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As a Filipino small business in the Philippines, you have a lot. You have to manage your business, but you also have to worry about taxes. Fortunately, there are 25 ways to reduce your tax burden in the Philippines and make life a little bit easier. Keep reading to find out more!

25 Ways to Reduce Your Tax Burden For Small Business in the Philippines

1. Get to know the tax system

The first step to reducing your tax burden as small business in the Philippines is understanding how the tax system works in the Philippines. This way, you can take advantage of all the deductions and exemptions you’re entitled

Related: How to Register Your Business as Barangay Micro Business Enterprise (BMBEs)

2. Keep good records

Good record-keeping is essential for any small business in the Philippines, but it’s imperative for taxes. Make sure you keep track of all your expenses and income to file your taxes efficiently and maximize your deductions.

Related: 10 Tips To Make Your Business More Profitable With Proper Bookkeeping

3. Hire an accountant

If keeping track of your finances sounds like too much work, you might want to hire an accountant. A professional can help you stay organized and ensure you’re taking advantage of all the deductions you’re entitled to.

4. Know your deadlines

Another important way to reduce your tax burden is knowing the deadlines for filing and paying your taxes. This way, you can avoid any late fees or penalties.

Related: BIR Extends Deadline for Online Business Registration

5. Invest in tax-efficient investments

Particular investments are more tax-efficient than others. For example, investing in index funds can help you minimize your capital gains taxes.

6. Take advantage of tax holidays

Did you know that there are certain times of the year when you can get a break on your taxes? These periods are called “tax holidays,” They usually coincide with major holidays like Christmas or Chinese New Year.

7. Claim all your deductions

As a small business owner, you’re entitled to some deductions. Make sure you take advantage of them all to reduce your tax bill.

Related: How to Reduce Your Tax in the Philippine

8. Use tax-efficient strategies when selling your business

If you’re planning on selling your business, there are specific tax-efficient strategies you can use to minimize your capital gains taxes. For example, you can sell your shares in an S corporation rather than sell the business’s assets.

9. Hold on to your receipts

Make sure you hang on to all your receipts, whether they’re for business expenses or personal purchases. This way, you can maximize your deductions come tax time.

10. Keep your business and personal expenses separate

It’s essential to keep your business and personal finances separate. This way, you can avoid any tax problems down the road.

11. Get organized early

The sooner you organize your records, the easier it will come to tax time. So make sure you get a head start on things and get organized as early as possible.

Related: 15 Common Bookkeeping Mistakes Filipino Business Owners Make – And How to Avoid

12. Use software to help with your record-keeping

Some software programs can help you keep track of your finances and prepare for tax time. These programs can help, especially if you’re not good at maintaining paper records.

13. Hire a tax professional

If you want to be sure you’re doing everything right come tax time, you might hire a tax professional. A tax attorney or accountant can help you maximize your deductions and minimize your tax bill. Contact us!

14. Stay up to date on changes in the tax code

The tax code is constantly changing, so it’s essential to stay updated on the latest changes. This way, you can ensure you’re taking advantage of all the deductions and exemptions you’re entitled to.

15. Know when to file your taxes

There are two different times when you can file your taxes in the Philippines: on April 15th or on June 15th. If your business is doing well, it’s usually best to file on April 15th to get your refund sooner.

16. File electronically

Filing your taxes electronically is the easiest and most efficient way. You can even set up automatic payments to avoid having to worry about missing a deadline.

17. Use direct deposit for your refunds

If you’re entitled to a tax refund, choose direct deposit. This way, you’ll get your money faster.

18. Pay your taxes on time

It’s essential to pay your taxes on time to avoid penalties or interest charges. If you can’t pay the total amount owed, make sure you at least pay the minimum amount due.

19. Make estimated tax payments

You might need to make estimated tax payments throughout the year if you’re self-employed. This way, you can avoid any penalties come tax time.

20. Request an extension if you need more time

If you can’t meet the deadline for filing your taxes, you can always request an extension. However, this will only give you more time to file – it won’t give you more time to pay any taxes owed.

21. Check your math before you file

It’s important to double-check your math before you file your taxes. This way, you can avoid any mistakes that could delay your refund or result in a penalty.

22. Use the correct forms

Make sure you’re using the correct tax forms for your business. If you’re unsure which forms to use, a tax professional can help you out.

23. Keep track of your deadlines

It’s essential to keep track of all your tax deadlines to avoid missing any important dates. You can use a calendar or set up reminders on your phone to help you stay on top of things.

24. File early if you can

If you can file your taxes early, it’s usually best to do so. You can get your refund sooner and avoid any last-minute rush.

25. Relax and don’t stress

Taxes can be stressful, but it’s essential to try and stay calm. If you feel overwhelmed, take a break and come back to it later. You can also ask a friend or family member for help if you need it.

Conclusions

Small business in the Philippines, there are some ways you can reduce your tax burden. By following these tips, you can make tax time a lot less stressful and ensure that you’re taking advantage of all the deductions and exemptions you’re entitled to.

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