Did you know that the average American will pay well over half a million dollars in taxes over the course of their lifetime?
That’s a dizzying amount of money. The question is whether or not that amount is necessary or not. Whether you’re paying taxes as an individual or a business, the first step is to plan things out.
Are you wondering why it’s so essential? Keep reading to learn all about the 4 benefits of business tax planning.
1. Pay Less
When it comes to business finances, the last thing you’d ever want to do is pay more than what something is worth. So why would you want to pay more in taxes?
One of the main goals of tax planning involves figuring out exactly what you owe down to the penny. This can end up saving you a ton of money over time, all of which can be put directly into your business. Simply put, planning out your taxes can allow your business to thrive for many years to come.
The main question concerns what’s deductible and what’s not. If you don’t have an intimate knowledge of this, you’ll almost always pay more than you have to.
2. Get More Back
Aside from owing less, there’s also the matter of how much you can get back after you’ve paid. This depends on how well you plan. By using outsourced bookkeeping, you can get the expertise of an in-house CFO without having to pay all the expenses that come with onboarding and keeping a full-time employee.
Rebates play a large role in determining how large your tax refund is, assuming you get one at all.
3. Reduce Your Liability
With a lack of financial planning comes a higher risk of getting audited. Audits can end up crippling your business with chores upon chores. They’re not only time-consuming but can also be quite expensive.
You can reduce the likelihood of an audit and other tax-related liability if you take the time to plan everything out ahead of time. With tax season preparation, you won’t make any eyebrow-raising mistakes.
4. It Could Inspire Change
There are only so many business financing options that are apparent without looking deeper. When you take stock of your business in a detailed way, you could discover that your business needs a change in tax status.
For instance, your business may be a sole proprietor now, but it could be that an LCC is much better for your situation.
Ready for Business Tax Planning?
Now that you’ve learned about the 4 benefits of business tax planning, you can ensure this tax season is one of the best ever. While taxes are unavoidable, that doesn’t mean you should pay more than what’s required of you.
We’re dedicated to decreasing your overhead while making taxes as simple and effective as possible. Our team of experts can also assist you with tax resolution, virtual CFO options, a range of financial services, and more.
If you have questions, feel free to schedule an appointment with us.
Learn how Sterling Tax & Accounting can add value to your business!
Your virtual accounting and technology experts providing back office, compliance & strategic solutions for busy professionals.