Tax Planning For Small Businesses—What You Need To Know
Tax planning allows you to arrange your business affairs in a way that mitigates risks and tax liabilities that can affect your business. Since nearly all business transactions are taxed, from financial transactions to investments, you must plan for taxes all year long—especially if you’re a small business owner! Putting off tax planning can lead to tax evasion charges if you miss to file the returns or with-held taxes.
A professional tax consultant can help you ensure all deductions, exclusions, allowances, and exemptions work together in a tax-efficient manner to relatively reduce the total tax bill. Additionally, they can help you minimize liabilities by making smart business choices.
Importance of Tax Planning
Here are some benefits of tax planning for both small and large businesses:
• Maximize tax credit or tax relief
• Lower the tax rate
• Lowering some amount of your taxable income
• Have greater control over tax returns
Laws and allowances change all the time, so make sure you get in touch with a professional advisor to save tax.
Strategies to Keep In Mind
Here are some factors you need to take into account when tax planning for small businesses. Consult your accountant for a more comprehensive list.
Figure Out Your Business Entity
The three letters you place after your company name can result in a massive tax burden if classified incorrectly. It’s important to figure out if you’re an LLC or LLP. A good tax professional can help you classify your business correctly if you’re unsure.
Look Into Your Investments
If your company invests in any funds, look into your portfolio. If any investments resulted in a loss, you can offset with gain from other investments within the same reporting period. If you’ve withheld these investments for over a year, consider the capital gain taxes on your investments.
Claim Healthcare Tax Credit
If you paid for healthcare expenses that qualify under the recent Income Tax Act, you can make a claim for these as eligible medical expenses on your income tax and benefit return.
Our tax consultancy firm in Edmonton, Alberta, can help you in your effective tax management efforts with thoughtful planning, strategy and informed advice.
From preparing and filing personal and corporate income tax returns to providing professional advice on cross-border tax strategies, our tax consultants ensure you don’t end up paying more or less than the taxes you legally should!
Get in touch with us for more information.