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.
Keep in mind that although there are ways to reduce or eliminate your taxes, performing tax actions with deceit, concealment, or subterfuge is illegal, but tax avoidance planning is completely legal. Any tax action with a fraudulent intention is tax evasion. When it comes to IRS assessments, IRS examiners will check any possible fraud in four areas including failing to report substantial amounts of income, accounting irregularities, 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. Overstatement of travel expenses and large deduction of taxpayer’s claim for charity donations without verification or foolproof documents are also fraudulent that constitute tax evasion. If there are accounting irregularities such as failure of a business to keep sufficient records or any discrepancies in the tax return and financial statements, these can also warrant fraudulent transactions or tax evasion. 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.
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. Proper planning is important when estimating your business and personal income for the next few years. We are the best tax planning professional you can count on in Foxborough. A good tax planning professional or agency provides excellent services, with a good reputation, foolproof credentials, good communication skills, and reasonably priced services. We are committed and dedicated to offering the best tax planning services to any type of business in Foxborough.