How are taxes and inflation related ?

Since its tax time, I thought I would answer a few questions related to money and also how prices and taxes ( thinks imports/exports) matters. Did you know that the increase and decrease of supplies ( paper, ink, printers) can fluctuate due to a lot of things, for example, inflation.

Q: What is inflation?

A: Increase and Decrease of money value.

Q: What does this have to do with taxes?

A: If you have to file business taxes, the amount of money that your items are worth can change from time to time, depending on inflation. If you use lots of foreign brands you will notice at times that prices are higher or lower at times. Also if the value of the dollar is doing not so well, you can see changes in things more drastically. Sometimes it will take a huge rise or drop to see a change.

A 2: Since we have a new Fed Reserve head, we will see how much more our inflation rate will increase. This can make writing items off not as satisfying and even not worth it. On the plus side if the inflation rate is lower than more spending is encouraged and saving those receipts is highly suggested.

Q: How do you save receipts for tax credit purposes?

A: Save those receipts and scan them to programs like Excel to keep track of them. They even have apps that help with this. You can keep for later and use them when filing taxes.

Q: How to save money when inflation is high?

A: It all depends on the type of service or product. For example, a price change even if it is .30 would help based on how many people buy your products; and how popular it is.You can even make items seasonal if you see a trend in inflation increases and decreases during certain times of the year.

A 2:  If you have supplies that constantly rise, finding a median price would work. Never cut corners on quality products, you will end up losing customers. Which in retrospect will cost more than buying the higher quality supplies( or higher overhead) and changing the price of the item(s)

I hope this helps! Include any questions or tips, comment below.

 

*Disclosure* Also ways chat with a trained professional or research the many online resources for tax and other financial understanding. *

 

 

Photo by William Iven on Unsplash