Tax planning refers to the process of looking at different tax options in order to identify when, whether, and how to best conduct a business as well as personal transactions for reducing or eliminating tax liability. Many small businesses ignore tax planning but this is an ongoing process and getting a good tax advice is very important. Whether you have a small, medium, or large business, it is your greatest benefit to review your monthly income and expenses, and regularly meet with your tax advisor or CPA every quarter to make an analysis on how you can take full advantage of the credits, provisions, and deductions that are legally available to you.
Remember that tax avoidance planning is legally accepted, however tax evasion or reducing tax through deceit, concealment, or subterfuge is not allowed or permitted by the law and this is a major offense. 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. Failure to report a shareholder’s dividends or a store owner’s portion of daily business receipts is a fraudulent action that constitutes tax evasion. Travel expenses that are overpriced or stated and a large reduction in the taxpayer’s claim for charitable contributions are also fraudulent activities that may lead to tax evasion case. It is important to keep sufficient financial records and financial statements, and don’t hide or conceal anything to IRS, otherwise, it may be considered a fraudulent tax avoidance warranting tax evasion. An example of improper income allocation is distributing earnings to a lower tax bracket taxpayer such as the shareholder’s children.
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. When it comes to tax planning a professional can help you in avoiding the most common mistakes of tax planning, reducing the taxable income amount, lowering tax rate, controlling time for tax payments, claiming tax credits, and controlling the Alternative minimum Tax effects. 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 provide accounting services and tax planning services to our clients in Foxborough. 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.