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A Guide to Tax Planning Strategy

Monday, June 4th, 2012

Tax planning strategies may be known to some people as tax schemes, however, we are talking about legal schemes and plans.It can help guide the conduct of both your personal and business transactions so you can have more money for other things such as expenses, expansions, and investments.This gives you plenty of time to learn about any changes that will be coming up the next year, and whether or not you need to adjust some of your investments.

Basically, the amount you can save from utilizing an effective tax planning method can be your source of working capital. Hence, many entrepreneurs are getting more and more interested in experts who offer tax planning services. The experts know the rules and can easily choose which strategy (or strategies) would work best for certain situations. Hiring them may cost some, but doing so can certainly save you a lot more in the end. That said, you can conclude that it’s an investment worth making.

Now, it’s important to note that simple tax avoidance is totally different from tax evasion. The former is about looking for ways on how to lower tax liability legally. The latter, on the other hand, is reducing your tax amount through deceitful means such as concealing transactions or irregular accounting. If you choose to avoid tax payment through legitimate means, you are being wise. If you opt to evade though, then legal consequences may hunt you in the future.

A tax planning strategy can be simple or complex. It can be designed for either an individual situation or a business. Whichever though, a professional tax planner will likely advise you to adapt not just one but several strategies to optimize your tax cuts. And regardless of the number of techniques, they are expected to accomplish any or all of the following:

Tax Rate Reduction

You can’t literally make your tax rate lower but you can do some things to attain such effect. One of these is by shifting investment assets to your children. Children belong to the “lower-bracket taxpayer” so they are not required to pay as much as you do.

Taxable Income Reduction

The best way to reduce taxable income is by availing all possible tax deductions both for personal and business situations. This means that you should know what the deductibles are. For instance, there are special deductions that may apply on business trips, automobile expenses, and even meals and entertainment. Purchasing an insurance plan or investing for your retirement can also help lessen taxable income.

Delay the Due Date for Your Taxes

This may not sound good because the word “delay” often connotes something negative. However, it is not so when it comes to taxpaying. You are not really refusing to pay what’s due. The idea is to legally delay the schedule for your payment. You can do this by doing things that will holdup the due date of declaring an income item.

Basically, it is about postponing the receipt of income till the next payment and accelerating the present payment of expenses. The rule of thumb is this: Minimize taxes now even when it means paying higher in the future. No one knows what’s going to happen anyway. Laws on taxation are always changing and you might end up paying something lower next time. Also, personal plans and conditions may take a turn and consequently, can affect the tax you have to pay. It would be ideal to take you chances. Besides, this is a tax planning strategy that has been tried and tested for decades. Businesses continue to use this tactic because apart from being feasible, it has never failed to work.

Welcome to Lauderdaleirscpa.com! If you are looking for a blend of personal service and expertise, you have come to the right place! Their Fort Lauderdale CPA practice offers a broad range of services for small business owners such as tax planning, business consulting (profit maximization, revenue growth), tax preparation and accounting (bookkeeping). They also assist individuals and businesses seeking tax help/relief with IRS tax problems . They are experienced and their fees are affordable.

Importance of a Tax Consultant

Thursday, July 7th, 2011

A tax consultant is also referred to as a tax advisor as he advises you on the best practices so that you can maximise your tax refunds. These individuals are trained in law and accounting procedures so that they can help you manage your taxes and cash flow as well. Filing your taxes can be a time and energy consuming endeavour so it is better to hire the services of tax consultants.

The need depends primarily on your business needs. In today’s day and age every penny saved in used to be reinvested in the business so it is very important that you get the correct financial advice when planning your business capital. Where taxes are concerned you can save a lot of money if you have the correct knowledge about deductions and applicable tax credits. This is not about finding loopholes or some grey areas, but if you know where to spend what amount, it can actually be profitable for you.

Most business owners, as the companies expand need to invest all of their attention in the company and in ways to grow, in such cases though important, they don’t have time to file taxes which is punishable by law. To avoid such issues it is the best practice to hire a professional taxation accountant who can file the right amount of tax at the right time.

Experienced tax consultants is what you should hire, don’t be fooled by students who are fresh out of the college and start offering financial and tax advice. Agreed there is a dearth of consultants, but make sure you hire only an experienced professional as this will save you money as opposed to shelling out extra to amend mistakes made by newbies. Inexperienced consultants can offer you misleading advice and this could lead to legal disputes, which something we all want to avoid at all costs..