Tax planning is defined as an arrangement of one's financial and economic affairs by taking complete legitimate benefits of all deductions, exemptions, allowances and rebates according to laws and regulations to ensure that tax liability reduces to a minimum. Tax planning implies that compliance with all taxing provisions in a manner that full advantage is taken.
Business Owners pay taxes regularly, therefore focussing on tax planning should be a regular occurrence. Proactive business owners plan so that they can avoid missed opportunities and capitalize on scores of perfectly legal opportunities to lower their taxes.
Tax planning can minimise the tax liability which in turn can provide additional cashflow for growth. With constant changes is legislation, business tax planning is optimised when using a professional business tax consultant such as The Accounting Team
Proper and through business tax planning ensures that maximum deductions and write-offs are identified, resulting in a lower tax being paid. Business tax planning should be an active component of your Business Plan and profit goals.
Legitimate deductions, loopholes, and exclusions must be explored and studied. Business Tax Planning involves taking estimating tax liabilities well in advance of payment and in turn reacting and action on certain divisions or debts in order to capitalise on the expected tax breaks.
Capitalising on tax benefits at the earliest possible opportunity is a prudent strategy that will save you cash.
There are numerous tax planning strategies available to business owners. Regardless of how simple or how complex a tax strategy is, it will be based on structuring the strategy to accomplish one or more of these often-overlapping objectives: