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. 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 legal but tax evasion or the reduction of taxes through concealment, deceit, or subterfuge is completely illegal. 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. Failure to report a shareholder’s dividends or a store owner’s portion of daily business receipts is a fraudulent action that constitutes tax evasion. 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. Allocating income to a related taxpayer in a lower income bracket where a company makes distributions to the controlling children of the shareholder is also fraudulent.
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 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. It is our dedication, commitment, and passion to provide excellent tax planning services to our clients in Foxborough and its surrounding areas with full confidence and expertise.