Business Tax Planning in Three Steps
Planning for your business taxes will be dramatically different than planning for your personal taxes. The benefit of tax planning during the year will without a doubt save you money, money that can be reinvested and used in your business. Below I’ve listed some key planning steps.
One of the best things for new business owners to do is to sit down with an experienced tax accountant to review your tax planning strategy for the year. A proactive meeting will allow you to understand tax credits, deductions and purchase timing to save you money.
- Start with a written goal, business owners that begin with an exact number amount, written down will succeed more than those that wing it. You can realistically save thousands in taxes based on your income, expenses, tax laws and more based on you company structure (link post).
- Know where you currently stand with your taxes, federal, state and local. I understand owing the IRS or state can be frighting, but to get where you want to be, you’ll have to face some facts. Review your prior year tax returns, read any and all letters you’ve received from the IRS or state taxing authority and if you haven’t filed taxes in a while contact a tax accountant professional and get started with filing your prior and current year taxes. Start where you are!
- Gain an understanding of tax laws and regulations, you should know how the taxing system works to out smart it. Everyone is subject to taxation, the amount of taxes you owe is based on your income. The key to paying little to no taxes is to lower your income. There are various tax rules and regulations that allow you to legally reduce your income.