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Optimize Your Business Tax Planning and Get Ahead

Business owners know that every penny spent on running their operations matters. Monitoring operational expenses is an essential responsibility of business owners like you, who seek to maximize revenue. You are continually seeking cost-saving operational efficiencies or simple ways to do more with less.

After all, generating profits is the goal of every business, and operational inefficiencies can negatively affect your bottom line. Yet for some reason, many smart business owners aren’t doing as much as they can when it comes to their business tax planning.

What is Tax Planning for Businesses?

What is Tax Planning for Businesses?

When many people think of tax preparation, they think of accountants, the IRS, a stack of government forms, and an April 15 filing deadline. Yet business tax planning, which is different than standard accounting, is a strategy that enables compliance with government IRS regulations while enabling business owners like you to pay just enough in taxes though not a penny more. If your business lacks such a strategy, you could be paying a lot more in taxes than you need to.

Business tax planning involves looking at your business financials from a holistic perspective that extends beyond complying with IRS requirements. By evaluating your financials and tax returns, tax planning experts can identify legal opportunities to lower your tax liability and associated costs. Such experts can also advise you on how to take advantage of new tax laws and regulations so you can pay less in taxes.

Tax Planning for Business Owners: What You Don’t Know Can Cost You

By working with business tax planning experts, you can employ several legitimate strategies for lowering your tax burden as a business owner. For instance:

  • You can shift your business income to strategic time periods or entities to reduce tax liability.
  • The timing of when you purchase business assets and when you offer employee promotions and bonuses matters significantly from a tax perspective.

Moreover, you can make the most of business tax deductions, including business expenses and donations to lower your larger tax burden. More than commonly thought of expenses, such as travel, office equipment, building rent, and mileage, you can also write off other expenses such as employee benefits programs (including 401k savings plans) as well as some research and development expenditures.

Leverage Business Tax Planning to Take Advantage of Government Incentives

Leverage Business Tax Planning to Take Advantage of Government Incentives

Sometimes, how a business is structured can result in greater or lesser tax implications. That is, business owners could have a larger tax burden just because they’re set up as a sole proprietor instead of an LLC.  

Moreover, many business owners may not be taking advantage of existing government tax credits and incentives because they don’t know about them. The government has numerous incentive programs for businesses, including ones for hiring military veterans and for building businesses in economically distraught locations.

While many business owners are continually trying to manage costs, they may be overlooking business tax planning as a vital way to maximize profits while spending less.

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