Tax planning, when well-strategized, much helps in achieving your financial and business goals. Any size, any type of business benefits from tax planning. You have to make sure that you hire the right professional to do it. It is a task that you can conveniently outsource to a virtual accounting firm.
Virtual accounting services providers have experts for every aspect of your accounting needs. Rest assured that they have a highly qualified tax accountant who will efficiently and competently handle anything tax-related for your business including tax planning and tax reduction strategies.
Pay the Lowest Business Tax Possible: Hire a CPA Tax Accountant
Tax planning is looking at your finances from a tax perspective and then coming up with strategies to reduce tax liability and overall tax efficiency. The U.S. Tax Code contains various tax deductions and credit and other tax breaks placed there by the U.S. Congress for the benefit of taxpayers. This makes tax avoidance built into the Internal Revenue Code.
Tax avoidance uses standard methods to significantly reduce the tax owed by a business or an individual. To be clear, though, it is most certainly different from tax evasion, which intentionally falsifies deductions or reduces reported income to minimize taxes. Tax evasion is illegal.
Tax avoidance, as mentioned, involves legal methods that are, frankly, rather complex. The complexity lies in significant part to the ever-changing tax laws. This is also why it is wiser to hire a professional tax accountant for your taxation needs. They know the tax code’s ins and outs, and they could give you more satisfactory results.
In business, there are things called allowable deductions, which reduce taxes legally. Allowable deductions are expenses that are deemed necessary to make an income. They must also be within the reasonable amount and complying with the withholding tax requirements, supported by documents and not contrary to law. Allowable deductions for a business include advertising and promotions; amortizations; charitable contributions; commissions; utility bills; fringe benefits; janitorial and messenger services; losses; office supplies; research and development; salaries and allowances; taxes and licenses; transportation and travel and a lot more.
Multinational companies, or their team of accountants, employ various strategies that effectively reduce their taxes. Small business owners could as well employ many tax saving strategies to reduce your taxable liability significantly. Here are some ways:
- Small businesses, particularly sole proprietorships, may opt to hire family members for a lower marginal rate.
- Opt for any of the retirement plans for business owners available on the IRS website.
- Put aside some money for healthcare needs.
- Consider switching your business structure into a Limited Liability Company (LLC).
- Invest in a reliable and efficient accounting services provider and/or a tax accountant.
Tax planning is incredibly beneficial, but please avoid DIY tax planning. Instead of reducing your taxes, you may end up paying a huge tax bill as well as facing a tax investigation. Leave your taxes to the experts. Get in touch with your virtual accounting services provider now.