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. As a business owner, tax planning is very important and getting a good advice is essential because tax planning is an ongoing process. 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. What actually sets tax evasion from tax avoidance is that the IRS find the action or intention fraudulent. 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. 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. Improper allocation of income include controlling tax distributions for lower tax bracket such as shareholder’s children.
A tax planning professional can help you by finding the right tax planning strategies. A tax planning professional can help you in reducing the amount of your taxable income, lowering your tax rate, controlling the time when you can pay your taxes, controlling the Alternative minimum Tax effects, claiming available tax credits, and avoiding the most tax planning mistakes. 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 provide accounting services and tax planning services to our clients 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.