Mar 25, 2021Tax Planning: Weighing if it’s Worth the Investment
Why all businesses should engage in tax planning
If you’ve ever had sticker shock when reviewing your completed tax return, you’re in good company. Too many people neglect appropriate tax planning strategies, which can help anticipate future returns and payments. When you receive an unexpected tax bill after filing, you may start to question the way your taxes were filed or if you had a reputable tax partner. The good news is that the frustration of this situation can be avoided.
Tax planning involves analyzing your financial situation and ensuring that all elements work together so you get the highest possible return. It gives businesses adequate foresight before actually hitting the “submit” button. This involves receiving guidance on what activities yield tax credits and generous deductions, allowing you to structure business in such a way that allows for the greatest possible return. By employing a competent tax planner, you can save money on taxes, prepare to either pay taxes or receive a refund, and avoid a surprising bill from the IRS.
Here are some ways to check if you’re receiving the quality of tax planning you need:
- Allows you to prepay business expenses toward year-end
- Charitable giving/donor advice funds
- Alternate standard and itemized deductions analysis
- Avoid late penalties and interest for forgetting quarterly payments
- Take advantage of safe harbor rules
- Proper retirement contributions
- Your business is taking advantage of deferred revenue/expenses
Tax planning is essential in any serious business. Without it, you’ll be giving away free money. If you haven’t already hired a tax planner for this tax year, it’s time to start looking for one. You’ll be glad you did!