Tax planning pertains to the process of studying different ways involving tax management to determine how to conduct personal transactions or business to reduce or eradicate tax liability. Many small businesses ignore tax planning but this is an ongoing process and getting a good tax advice is very important. There are actually tax provisions, deductions, and credits existing and governed by the law which is legally acceptable, so you can take advantage of these by discussing these with your CPA or tax advisor whether you are engaged in a small, medium, or large business.
Keep in mind that although there are ways to reduce or eliminate your taxes, performing tax actions with deceit, concealment, or subterfuge is illegal, but tax avoidance planning is completely legal. Any tax action with a fraudulent intention is tax evasion. The IRS examiner checks four different areas for any possible fraud such as accounting irregularities, failing to report substantial amounts of income, claims for improper or fictitious deductions on a return, and improper allocation of income. Failing to report a portion of your daily business receipts or shareholder’s dividends is fraudulent and may lead to a tax evasion case. Travel expenses that are overpriced or stated and a large reduction in the taxpayer’s claim for charitable contributions are also fraudulent activities that may lead to tax evasion case. Another type of fraudulent activity includes failure to keep adequate financial records or discrepancies on tax returns. An example of improper income allocation is distributing earnings to a lower tax bracket taxpayer such as the shareholder’s children.
There are countless planning strategies available to small business owners, and by hiring the services of a tax professional, you can be assured that you won’t need to face any legal charges pertaining to your taxes. The different tax planning goals that a professional can help you with include reduction of taxable income, tax rate reduction, control time tax payments, claim of available credits, control effects of Alternative Minimum Tax, and avoid the most common mistakes of tax planning. Proper planning is important when estimating your business and personal income for the next few years. We are the best tax planning professional you can count on in Foxborough. It is essential to hire a tax planning professional in Foxborough with a good reputation, foolproof credentials, and with good communication skills so business owners can fully benefit from the service. Our tax planning professionals are passionate, committed, and dedicated to providing the best tax planning services to our clients for Foxborough.