Tax planning is defined as the process of looking into various tax options for determining whether, when, and how to conduct personal transactions or business to reduce tax liability or eliminate it completely. Many small businesses ignore tax planning but this is an ongoing process and getting a good tax advice is very important. Regardless of the size and type of your business, it is beneficial for you if you have a regular meet up with your tax advisor or CPA at least every quarter so you can discuss and review your monthly expenses and income, taking advantage of the provisions, deductions, and provisions that are legally available for your business.
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. 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. Failing to report a portion of your daily business receipts or shareholder’s dividends is fraudulent and may lead to a tax evasion case. A tax evasion case may also be charged if there are overly priced travel expenses as well as large deduction for charity donations without proper documents presented because these are fraudulent in nature. Another type of fraudulent activity includes failure to keep adequate financial records or discrepancies on tax returns. An example of improper income allocation is distributing earnings to a lower tax bracket taxpayer such as the shareholder’s children.
By seeking the help of a tax planning professional, you will be helped to find the best tax planning strategy for you in a legal and acceptable way. 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. 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 are the best tax planning professional you can count on 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.