Business Tax Planning
Businesses are an essential part of the economy; there are over 30 million small businesses that drive our economy. Evidently, business tax planning is more necessary than ever in order to create profit for a company, regardless of whether it is a small business or a large corporation. Smart and strategic tax planning is a fundamental asset for the survival of any business in today's economy.
It is common for small businesses to underestimate the importance of tax planning. Business tax planning involves the analysis of the business’ current financial system or plan for the purposes of tax and tax efficiency for the business. A successful tax plan will take advantage of current deductions and credits available by the government, allowing businesses to pay the minimum amount of taxes as well as controlling when the taxes must be paid. An important advantage of tax planning is that it guides businesses towards smart year-end decisions that promote profitability and growth.
Basics for Business Tax Planning Strategies
- Having a proper filing system and organizing documents
- Having a bookkeeper, making sure that the organized documents have been recorded and the financials are always up to date.
- Making sure the business takes advantage of all the tax credits and deductions available to your industry.
Business owners are busy trying to stay afloat, run payroll and make decisions on a daily basis. It is next to impossible for businesses to be aware of all the tax laws, credits and deductions available to their industry. A tax planner/tax professional can help and guide you to make smart tax decisions for your business.
We at LifeBack Tax can provide you the tools and guidelines necessary to save you the most in taxes, so that the business pays what it actually should.
Business Tax Planning FAQs
To prepare and plan for business taxes, it’s important to do a handful of items to create a structure and maintain it. Items of priority to stay on top of are to make sure you have a proper filing system for organizing documents, take advantage of the deductions available in your business industry, and have a bookkeeper to help make sure that all financials and documents are up to date and kept in easily accessible places for tax time.
It’s important to start tax planning as soon as you possibly can. By starting early, you remove room for error and have the ability to structure a plan before you have to execute any action relating to your business taxes.
Although taxes differ by state, there are 5 basic types of business taxes to know of when doing business tax planning. These include self-employment tax, employer tax, income tax, estimated tax, and excise tax.