Income tax obligations are among the costliest–and most confusing–elements of running a business. Understanding tax law well enough to shrink your bill, on the other hand, can be a rewarding task, one that can save you money. So tax planning is critical.
The goal of tax planning is to minimize the amount you have to pay while staying within the law. You do that by aligning your anticipated income and your tax-related actions. This is especially valuable if you will owe taxes that you can cut. So the first requirement is a good budget that estimates what you plan to make in the coming years. With that as a goal, you can identify which years may require more deductions.
If, for example, you need new or additional computer equipment for your operation, the year that you buy the equipment will generally determine when you get the tax break. If you put the new equipment in place before the end of 2011, you can likely deduct the cost of the equipment as depreciation on your 2011 taxes. If it is put in place next year, there is still an advantage, but not as great as this year.
Our tax service can help you align your tax-related actions with your expected income so that you can lessen your tax expense.
Keep in mind that many actions require some time to take effect. So the time to start planning for next year’s tax bill is now. We at Net Plus Consulting will work side by side with you to minimize your Federal and state tax obligations.