While tax planning may not be many people’s idea of fun, the benefits of smart financial planning for small business owners is critical, tax experts agree.
Many small business owners tend to neglect this important aspect of their business, not thinking much about taxes until it’s time to dig through their paperwork and file their tax returns. However, putting in the time throughout the year will ultimately save you time –and, likely, money.
Reviewing your income and expenses monthly and meeting with your CPA or tax advisor quarterly can be advantageous. Doing so, say financial planners, can help you take advantage of credits and deductions to which you may be legally entitled.
There are many tax planning strategies for small businesses, ranging from simple ones to those that are quite complex. Regardless of the particular strategy that’s most beneficial to you and your business, planning is key. All strategies will help move you toward your goal of improved financial planning.
Whether you want to reduce the amount of taxable income, lower your tax rate, manage your tax payment schedules, or avail yourself of all potential tax credits and deductions, working with a tax professional will be time well spent, according to financial planning professionals.
Of course, most small business owners want to maximize their business expenses, thereby decreasing their tax liability. There are numerous opportunities for this that are both fair and acceptable, providing all legal requirements and guidelines are met.
From business meals to car expenses and home office deductions, all can be considered with the proper accounting, record keeping and professional guidance to ensure you are in compliance with IRS regulations. It is always recommended that you consult a CPA or other financial expert to help guide you in your planning.
It’s important to note too, that estimating your personal and business income is an essential part of developing tax planning strategies. At Diamond & Associates CPAs, we help businesses of all shapes and sizes meet their financial and tax obligations, not just at tax time, but throughout the year. If you need assistance with tax planning strategies, please reach out to one of our tax advisors. We are here to help!