March 06, 2013 /24-7PressRelease/
-- Tax planning tips for business owners
Article provided by M. Bradford Randolph, Esq., PLLC
Visit us at http://www.mbrlawfirm.com
While it is easy to put off thinking about taxes until the spring every year, New York City business owners should consider the tax implications of purchases, sales, income and expenses throughout the year. A tax planning professional can help businesses create plans that ensure they minimize the amount of taxes they pay.
The value of working with a professional tax planner
Making a mistake on tax forms can be quite costly for businesses. One flaw in payroll, income or sales tax calculations could cost a company quite a bit in fines, penalties and punitive interest from the IRS. Professional tax planners can help companies avoid these costly mistakes and give them confidence that their tax forms are correct.
In addition to tax preparation help, professional tax planners also help companies plan for taxes throughout the year. A tax planner is able to tell a company when and if they should claim certain deductions and whether or not tax implications make it wiser to hold off on a big purchase or sale or make one immediately.
Tax planners can also help small business owners decide if claiming the deduction for charitable contributions would be more beneficial reported on their businesses' tax returns or their personal returns.
Tax planners help businesses decipher deductions
One of the benefits of hiring a tax planner is that they can help businesses take advantage of the many deductions included in the tax code. Some small business expenses can be deducted from a company's gross income, including travel expenses, entertainment expenses and expenses for a home office or vehicle.
Likewise, the IRS allows business owners to deduct start-up costs of up to $5,000 in some cases. It can also be possible for a company to deduct the costs of certain business purchases over the useful life of the purchase. For example, a company vehicle may last seven years, so a business may be able to spread out the cost in tax deductions over seven years. However, there are many rules and restrictions that apply to this and other deductions, so consulting a tax planner is important to make sure a company does not claim a deduction for which it does not qualify.
How businesses may control their tax "due date"
While the actual day on which taxes are due is not moveable, it is possible for businesses to gain some control over when they pay taxes. It is possible for some small businesses to negotiate with the IRS to pay taxes on a monthly basis when a lump sum payment in April is too burdensome.
Carefully planning the dates on which companies purchase or sell assets can also help businesses control when they will have to pay tax on a certain transaction. For example, if a company needs to make two major sales of assets, it may be advantageous to try to make one sale in one year and the next sale in the following year. For example, if a company needs to sell two commercial properties, it may be best to sell one in November then the other in January to spread the income between two tax years.
Professional tax planners can help both large and small businesses work tax considerations into their yearly business plans. To learn more about how professional tax planning may benefit your business, contact an experienced tax attorney.---
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