As a self-employed person, tax consequences are something you might want to take into account whenever you make a financial decision involving your company. You should also do this as regards any personal financial decision to be made. Tax burdens have become sufficiently extensive that, often, the success or failure of a business will hinge on taxation. It’s possible to have transactions arranged in such a way that a purely average transaction could turn into a big winner because of adroit tax planning.
Most small businesses can’t really afford to have tax advisers on the payroll to quiz whenever needed. Usually, we are consulted once or twice a year. Regardless, small business people must make decision throughout the year which will affect how much tax that they will owe. As such, the best solution for you is to acquire a working knowledge of the tax system as it applies to your circumstances, along with an idea of how you might consult with professional advisers such as ourselves to help you with decision that are either significant or complex.
In order to do this you don’t really need to know all the technical ins and outs of tax law, but you do need to have a basic knowledge of how the system works.
Small business are probably the sector of the economy most in need of good tax planning and tax education because the IRS has identified small business as being one of the most fruitful sources of increased tax collections via either tax audits or other enforcement actions. While the IRS is increasingly targeting small businesses, these businesses often don’t have the resources to be able to comply with the miles of red tape passed down by tax agencies, or to put up a good defense when one of those agencies decides to pick on them for their failure to properly process the red tape. in order to operate in this environment, small businesses need to come up to speed on various aspects of the tax system.
Simply keeping decent records, having acceptable bookkeeping, staying honest, and having someone in the company who is up to date on the major issues and the major changes in our tax system are usually enough to enable a small business to successfully negotiate the maze which lies before them.
With that said, give us a call and make an appointment to come in and do your small business tax planning. You will find that this activity will be well worth your time and effort!
William D. Truax E.A. Inc
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