Tax Planning Comes in Many Forms and Is Always of Critical Importance

July 29, 2013

There are quite a number of issues an accountant can help a business with. Among the most important areas of concern that can be addressed would be that of tax planning. The critical word to center your attention on here would be planning. Far too commonly, many businesses will become focused on tax payments. They will log their revenue and their expenditures and bring them to an accountant on April 14. With any luck, the finished return may go out the same night or, at the latest, it will get its April 15 postmark the next day.

Or, a nightmare scenario may ensue. The accountant may reveal there are scores of other taxes the business has to cover such as business occupancy tax, gross receipts taxes, tax penalties related to the new healthcare law, and, most insidiously, that the business is a business.

What is meant by that? A great many Schedule C files do not realize they are considered businesses in the eyes of their local tax authorities. This means they might have to pay special taxes and procure business licenses. They could also be required to other costs they had not thought of.

Revelations such as these could lead to (legally) delaying the filing of a return….or several returns including federal, city and state as extensions can be offered. The problem is penalties and interest can accrue. This all would be accruing on thousands of more dollars of tax payments you originally did not know you were required to pay.

Once again, taking advantage of tax planning services might be the best strategy to employ. By tax planning, it is meant the business filers would meet with a tax accountant long in advance of the due date of the tax return. This way, the taxpayer truly understands what the process will entail and how much estimated and final taxes he or she will be required to pay.

How does the old saying go? An ounce of prevention is worth a pound of cure. Tax problems can become very costly and difficult to deal with. The problems become worse when the problems have to be handled very close to a due date or, worse, after a tax filing deadline. Once again, fines, penalties and interest all must be covered. This can all run into huge costs and overruns if not planned for properly. The very essence of tax planning is to help overcome any problems associated with a lack of foresight or proper planning. This is not to suggest no problems will occur, but a lot of major oversights will never happen with the right tax accounting professional in place.

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