Small Business Tax Planning

One of the most essential parts of running a successful small business is good tax planning. With a good tax plan, you’ll keep what you earn instead of giving it away on taxes.

If you aren’t a tax expert, the US tax code may seem too complicated to handle. That is the main reason why taxes are the biggest expense for most small and medium-sized business owners. Without deep knowledge and understanding of tax laws, you can end up paying much more for taxes than you actually have to or experience tax problems that would otherwise be easily avoidable.

Studying tax regulations and dealing with taxes by yourself can take up considerable time – the time you could be spending on growing your business.

That is why you should take advantage of a professional tax planning service.

What Is Tax Planning?

Tax planning is analyzing your financial situation and structuring it so that you minimize your tax liability while maximizing your profits. A plan or strategy that allows you to pay the lowest taxes possible is called a tax-efficient plan.

A tax-efficient plan takes into account all provisions of the tax code and determines which path will bring you the most benefits. Efficient tax planning is a necessity for every small business owner who wants to grow their business.

Business tax planning involves many things, some of which are:

  • Taking advantage of timing on sales
  • Setting up trusts
  • Setting up retirement plans
  • Working on investment strategies
  • Reviewing the filing status of your business

In short, business tax planning involves analyzing and forecasting what impact your financial decisions will have on your taxes. A tax planning expert can help you develop an efficient tax plan while you can focus on growing your business.

Why Is Tax Planning Important?

All of us have to pay taxes. However, it’s legal and even desirable to take advantage of the current tax law and minimize the amount you have to pay. Tax planning is important for every small business owner who wants to maximize their profit.

Most small business owners don’t look forward to tax season or year-end tax because they lose much of their income. The reality is that many of them aren’t familiar with the US tax code and because of that overpay their taxes.

It can be hard dealing with the complex tax code the US has on your own, so hiring tax experts to give you tax advice is the best option. Experienced tax accountants can help you take advantage of tax deductions. What’s more, they can also help you reduce or even avoid paying your taxes as much as the IRS allows.

 

What Are The Benefits Of Tax Planning?

Tax planning has many benefits, including:

  • Reduced tax liability
  • Minimized litigation
  • Contributes to economic stability
  • Increases productivity
  • Helps you in forecasting the financial position of your small business
  • Provide you with investment opportunities that’ll produce income and improve your business structure

With an efficient tax plan, you can do more than reduce your tax liabilities – you can make your business more successful and grow faster in a shorter time frame. You’ll also be able to defer income so that you keep what you make and pay the lowest amount of taxes later.

Tax Planning Strategies

With a tax plan strategy, you can track your business revenue and figure out whether you’ll be under a low or high tax bracket next year. No matter if you’ll be falling under a higher or lower tax bracket, you can take advantage of this. For example, if your business revenue has increased so much that you’ll be in a higher tax bracket next year – you can take advantage of the current tax rate by collecting monies early this year.

It’s essential for every small business owner to know which tax planning strategies will bring the greatest reward. Here are a few tax-saving strategies you can implement to grow your business faster.

 

Tax-Free Business Retirement Plan

The average life expectancy in the US has drastically increased in the past couple of decades. That is why it’s now more critical than ever to think about your retirement plan.

A good retirement plan will ensure that you have efficient retirement funds to live comfortably and without worries when they become your only source of income.

Legitimate tax strategies can help you minimize your taxable income and thereby maximize your retirement funds. You may not know what tax rate to expect when you retire, but you can limit the taxation on your retirement fund by implementing certain strategies in your business.

 

Financial Modeling And Forecasting

Financial modeling and forecasting can help test or verify tax strategies, products, or ideas before making the final financial decision. That reduces the chances of making a poor decision because you can see all products and strategies together on one page.

By understanding what impact your financial decision will have on your business income, you can develop a strategy that will minimize your tax payments and maximize your tax savings.

Types of Businesses That We Help

To efficiently do your taxes you need to have deep knowledge of the tax codes and current regulations. Moreover, you really need to be good with numbers if you don’t want to end up paying more taxes to the IRS than you actually have to.

Consulting with a tax professional may be the better option than trying to handle everything on your own. By hiring us to take care of your taxes you can keep peace of mind while having firm control over your business finances.

Our tax planning and tax preparation services are available for all small business clients, from sole proprietorship to C corporations. With our help, you can actually look forward to tax season.

 

Sole Proprietorship

Sole proprietorship or self-employment is when you’re the only owner of the business and the only person responsible for anything that may happen to it. From the legal viewpoint, the business and the owner are the same, meaning that all income tax, business expenses, liabilities, and assets are assumed by the owner.

If you own this type of business, your main focus should be your self-employment. We can help you pay only the least amount of taxes allowable by the IRS by creating a tax-efficient plan for your small business.

 

General Partnerships

In general partnerships, the business and its owners are the same according to the tax law. The assets and liabilities in this type of business are shared amongst the owners. The amount owners pay depends on the percentage they own.

General partnerships can take advantage of the tax codes with an efficient plan. We can help you develop the perfect tax plan for your business to reduce taxes and save money.

 

Limited Liability Companies

Legally, the business and its owners are separate in limited liability companies.

For tax purposes, limited liability companies are treated as partnerships and are “pass-through” businesses. That means they’re not subjected to double taxation.

 

S Corporations

In S corporations the business and its owners are separate entities. S corporations are similar to limited liability companies and so are their taxes.

 

C Corporations

The owners and the business are separate in C corporations, meaning they have double taxation. This business type is ideal for offering shares to investors. Moreover, C corporations can realize significant tax savings.

Sole proprietorships, general partnerships, limited liability companies, and S corporations can be elected to be taxed as C corporations and thereby make significant savings. This is because the Tax Cuts and Jobs Act of 2017 changed the highest corporate income tax from 35% to 21%.

 

Non-Profit Entities

Non-profit entities aren’t obligated to pay federal taxes when turning over all the taxable income to organizations and individuals who’re lawfully recognized as charitable. They need to file taxes to stay compliant.

How We Can Help You

No matter how successful your business is in the long-term, with our help you can have financial stability and security in the future. With our tax plans, you can accelerate and defer income so that you maximize your growth as a business.

 

Small Business Owners Success

We’re here to help small business owners improve their tax situation. We’ll do more than just focus on your tax compliance. With our help, you’ll see your business grow and succeed on every level. From fixing the current tax situation to developing a business retirement plan that will ensure you live comfortably in the future – There’s nothing our tax accountants can’t help with.

Most business owners use the cash method of accounting that is based 0n calculating income when money is received. While the cash method is simple, it still has some disadvantages. For example, it can overstate the health of your business. To the investor, it can look like you’re making profits, while you’re in reality losing your income.

We’re here to help you create a tax strategy for your business that will bring you the most advantages. We can also help you file your annual tax return and find out how much tax credits your business is qualified for.

 

Minimize Your Tax Liability

Tax preparation, planning, and developing the perfect tax strategies for small businesses are our specialties. By creating a tax-efficient plan, you can take advantage of the tax law and lower your tax rate in many different ways.

Most people miss out on deductions such as qualified business income deduction because they don’t know if they’re eligible for QBC. With us, finding out if you’re eligible or not won’t be challenging anymore. We can also help you make the right financial decisions and use investments to produce tax-exempt income.

 

Be Up To Date With New Tax Regulations

Tax laws and regulations can vary widely from state to state. Moreover, they can easily change without you knowing it. With us, you don’t have to keep track of that anymore.

We go through great lengths to keep up to date with new tax regulations and laws. If there are any changes in the laws and regulation, we’ll work out a strategy to implement all the advantages the changes may have in your business plan.

Contact us for a free consultation and discover how our tax planning service can help you.



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