Tax Prep and Planning
Arizona Tax Planning Services
Whether you are a business or an individual, when it comes to taxes, everyone wants to pay less. Planning ahead can help you do just that. Call AZ Accounting to save yourself time and energy, and make sure your taxes are done on time. Whether you’re looking for individual or business tax preparation services, AZ Accounting is the solution. We work with you throughout the year to create a smart tax strategy that works with your personal or business goals.
Why Tax Planning is Important
Taxes apply to almost all businesses that’s why it’s important to understand it as much as you can. Some types of tax include VAT, consumption tax, progressive tax, property tax. While the term tax planning is widely used in the business industry, not everyone understands it well. This article will discuss tax planning, its types, and how it can help your business.
What is Tax Planning?
Tax planning refers to the activities done to minimize tax liabilities, ensuring that all allowances, exclusions, deductions, and exemptions are working together most efficiently to reduce total tax bills. It has many applications – for businesses, retirement, properties, and wills.
Types of Tax Planning
Several types of tax planning exist and each one caters to individuals, organizations, or companies. Here are the four types of tax planning.
Short-Range Tax Planning
This type of tax planning is executed to fulfill specific or limited objectives, usually on an annual basis. It is mostly executed at the end of each year to legally reduce taxable income. Additionally, short-range tax planning doesn’t require permanent commitment.
Long-Range Tax Planning
Long-range tax planning refers to the practices that the assessee undertakes. Most of the time, it is done at the start or the income year to be followed throughout the year. The effects of this tax planning type do not occur immediately as well.
Purposive Tax Planning
A tax planning of this type smartly applies tax provisions to avail tax-related benefits on national priorities, intending to generate the maximum benefit possible. It creates a suitable program for correct investment selection, replacement of assets, business activities and income diversification, and residential status variation.
Permissive Tax Planning
Permissive tax planning consists of plans that are allowed under various law provisions. This includes planning related to taking advantage of deductions, incentives for getting different tax concessions, and earning income. Simply put, it pertains to planning that considers the provision of tax laws.
How Tax Planning Helps Businesses
The implementation of tax planning is essential for both small and large businesses in achieving business goals. When you utilize a tax planning strategy, you can reduce taxable income, reduce tax rates, and gain more control of when to pay taxes.
Depending on your business type, you can experience many benefits. International businesses can also manage tax bill timing and avoid double taxation. Moreover, taking note of your business sales and clients gives you a much greater grasp of what financial aspects qualify for tax exemption.
Tax planning helps both small and large businesses in achieving their business goals. If your business invests funds, it is helpful to enlist through tax planning to oversee all operations. If any investment resulted in a loss, it can also help you find a way to counterbalance that loss using the gains from other investments.
The previously-mentioned benefits are only a fraction of the many advantages brought about by tax planning. This is why getting your tax planning right is ideal and something not to be overstated. To get started, you can speak to a financial advisor today.
Tax Preparation FAQ
Why should I hire a bookkeeper?
Most people believe they are saving money by doing everything themselves, however, hiring a professional bookkeeper can save you money. Hiring an experienced bookkeeper will often save you more time than the money you save. For business owners, time is money.
What are the benefits of hiring a bookkeeper?
There are several benefits for business owners who decide to hire a bookkeeper. The main reasons are to prevent errors, to stay on schedule, and to free up valuable time.
Accountant vs Bookkeeper Whats the difference?
Bookkeeping is the recording of all purchases and sales that your business does. Accounting is an analysis of what that data means for your business. An accountant can be considered a bookkeeper, but a bookkeeper cannot be an accountant without proper certification.
Do I still need an accountant (CPA)?
An experienced bookkeeper can perform many accounting tasks. However, only CPAs, tax attorneys, and enrolled agents are able to represent you on your behalf before the IRS.