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. There are actually tax provisions, deductions, and credits existing and governed by the law which is legally acceptable, so you can take advantage of these by discussing these with your CPA or tax advisor whether you are engaged in a small, medium, or large business.
Remember that tax avoidance planning is legal but tax evasion or the reduction of taxes through concealment, deceit, or subterfuge is completely illegal. What actually sets tax evasion from tax avoidance is that the IRS find the action or intention 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. An example of fraudulent action is failure to report a part of daily business receipts or shareholder’s dividends. Overstatement of travel expenses and large deduction of taxpayer’s claim for charity donations without verification or foolproof documents are also fraudulent that constitute tax evasion. 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. Allocating income to a related taxpayer in a lower income bracket where a company makes distributions to the controlling children of the shareholder is also fraudulent.
There are countless planning strategies available to small business owners, and by hiring the services of a tax professional, you can be assured that you won’t need to face any legal charges pertaining to your taxes. 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. If you are looking for a trusted, reputable, and reliable tax planning professional in Foxborough, we can help you by visiting our website or homepage now. We are a tax planning and tax returns professional who can help you with your business. 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. It is our dedication, commitment, and passion to provide excellent tax planning services to our clients in Foxborough and its surrounding areas with full confidence and expertise.