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. 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 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. What makes tax evasion different from tax avoidance is that the action is 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. Failure to report a shareholder’s dividends or a store owner’s portion of daily business receipts is a fraudulent action that constitutes tax evasion. 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. 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. 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 provide accounting services and tax planning services to our clients 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. Our tax planning professionals are passionate, committed, and dedicated to providing the best tax planning services to our clients for Foxborough.