Tax Planning – why it’s key to get your YE final estimates to CPA
Thinking about taxes is as exciting for most business owners as a root canal. No disrespect to our CPA friends. But there are many important reasons to start early to avoid penalties and reduce tax exposures.
Regardless of how simple or how complex a tax strategy is, it will be based on structuring the strategy to accomplish one or more of these goals:
- Reducing the amount of taxable income
- Lowering your tax rate
- Managing tax payments and schedules
- Maximizing any available tax credits
- Mitigating the effects of the Alternative Minimum Tax
- Avoiding common tax planning mistakes
There are many deductions that you may not know you have available to you. Small business owners should discuss deductions with their advisers, including automobile deductions, home office deductions, travel expense deductions, and entertainment expense deductions. Taking advantage of deductions allows you to deduct business costs from gross income.
Ongoing tax planning will ensure you fully use allowable expenses to reduce your tax liability. Effective tax planning can also enable you to bring forward expenses or defer income, delaying tax payments.
We recommend you consult your tax accountant to decide which strategy is best for your firm.
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