Tax planning refers to the process of looking at different tax options in order to identify when, whether, and how to best conduct a business as well as personal transactions for reducing or eliminating tax liability. Tax planning is an ongoing process so seeking a professional advice is crucial to ensure it is done properly, but many small business owners are ignoring this fact. Whether you have a small, medium, or large business, it is your greatest benefit to review your monthly income and expenses, and regularly meet with your tax advisor or CPA every quarter to make an analysis on how you can take full advantage of the credits, provisions, and deductions that are legally available to you.
Remember that tax avoidance planning is legally accepted, however tax evasion or reducing tax through deceit, concealment, or subterfuge is not allowed or permitted by the law and this is a major offense. What makes tax evasion different from tax avoidance is that the action is fraudulent. The different areas that IRS examiners check when ruling out possible fraud includes accounting irregularities, and improper allocation of income. An example of fraudulent action is failure to report a part of daily business receipts or shareholder’s dividends. 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. It is important to keep sufficient financial records and financial statements, and don’t hide or conceal anything to IRS, otherwise, it may be considered a fraudulent tax avoidance warranting tax evasion. 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. A tax planning professional can help you in reducing the amount of your taxable income, lowering your tax rate, controlling the time when you can pay your taxes, controlling the Alternative minimum Tax effects, claiming available tax credits, and avoiding the most tax planning mistakes. For you to plan effectively, it is important to estimate personal and business income for the next coming years, and hiring a tax planning professional in Foxborough can make this happen. We provide accounting services and tax planning services to our clients 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. We are committed and dedicated to offering the best tax planning services to any type of business in Foxborough.