The Bigger Picture of Business Tax Planning

Friday, December 1, 2017, 6:00 AM | Leave Comment

Business tax planning needs no season and time. If you think you need some, you should go ahead and get some.

The critical step is to find the balance between your business goals, your income and expenses and your tax payments. You need to consider all the different kinds of taxes your business may need to pay to file a sound tax return.

Being organized in your payments and saving the related paperwork is an excellent start to any tax planning venture for small, medium and large businesses.

  • How to start planning for tax planning?

    Doing taxes for an entire business is not a joke, and it is not a one-time job either! Early in the year is the best time to discuss with your accountant about your business saving and tax plans planning goals.

    If you have not got the chance to appoint a business accountant yet or speak to your tax lawyer, it is not too late.

    You can always outsource the tax planning needs of your business to a responsible and experienced tax firm or tax planning company.

    Just make sure you have the following documents –

    • Profit and loss statement from January 1 of the current year to the most recent month.

    • A balance sheet including all your business liabilities and assets.

    • All information about your home office for simplified deduction purposes.

    • All the information you have on your business assets.

  • Outsourcing your tax planning responsibilities is a great idea!

    More small and medium businesses are investing in outsourcing tax preparation services. Getting an expert’s advice can help your business save thousands of dollars in tax deductions each year.

    While most small and medium business owners only think about business income taxes, there are other taxes that they need to pay as well.

    Here’s a concise checklist of the most common business taxes you have to pay to run a successful business in the USA –

  • Business income taxes: this depends upon the legal form and categorization of your business.

  • State and local income taxes: these depend on the state, where your business is and the locality of the same.

  • Employment taxes: most employment taxes in the USA are federal in nature. There are a few who are in the state, and they can vary considerably.

  • Self-employment taxes: these taxes depend directly on your business income. They can be higher or lower depending on how successful your business is.

  • Business licenses and permits: this is an added cost most businesses have to bear. You have to pay the amounts to the state government authorities and central government authorities.

Another great way to reduce business taxes is by keeping a detailed record of business taxes, expenses, incomes and even petty cash. These records will help during the year-end while filing the tax returns. Without the proper paper records, your business might not get the deductions you deserve.

To always stay on the right track, distinguish between essential receipts and trash, and to save other documentation that will help your business gain more for the new tax reforms, you should invest more thought in tax planning.

Author bio

Jennifer Mathews is an expert in tax planning. She has helped many medium and large companies to earn their tax deduction by facilitating outsourcing tax preparation services for them within permissible budgets.

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