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. 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.
Keep in mind that although there are ways to reduce or eliminate your taxes, performing tax actions with deceit, concealment, or subterfuge is illegal, but tax avoidance planning is completely legal. Any tax action with a fraudulent intention is tax evasion. When it comes to IRS assessments, IRS examiners will check any possible fraud in four areas including failing to report substantial amounts of income, accounting irregularities, 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. 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. 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. 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. A good tax planning professional or agency provides excellent services, with a good reputation, foolproof credentials, good communication skills, and reasonably priced services. We are committed and dedicated to offering the best tax planning services to any type of business in Foxborough.