If you own a business, financial planning is likely something you do every year. You know that it is essential to guiding your financial decisions for your company, and you would likely never consider skipping it. And yet, many business owners skip what should be a central part of their business’s financial planning—business tax planning.
Of all the expenses you have associated with your business, taxes are certainly one of the largest. So why would you not take the time to factor this expense into your other financial plans for your business? Here are several ways that business tax planning in Provo can help you to make smarter financial decisions for your business, as well as helping you to save money.
Learning How Tax Law Changes Impact You
Did you know that tax laws can change every year? While you might be aware of major changes like the recent Tax Cuts and Jobs Act, most changes to tax law go unnoticed by taxpayers. It’s important that you know how every change—both large and small—impacts your business and personal finances. Meeting with a CPA before the end of the year can help you to understand these tax laws so that you can make more informed financial decisions.
Tax law touches every part of your business, from your income to your expenses. Every dollar you make and every dollar you spend impacts your taxes, and vice versa. Understanding exactly how the tax laws affect you can give you important guidance on major financial decisions that you make throughout the remainder of the year, as well as into next year.
Guidance on Making Large Purchases
When you conduct your business’s financial planning, you likely consider whether or not it is the proper time to make major purchases, such as new equipment and new business vehicles. Most likely, you’ll examine the benefits of the new equipment, your company’s need for the new equipment, and whether or not you have the funds to make the purchase. But do you ever take the time to consider the tax implications of those purchases?
Proper business tax planning, as a part of your financial planning, can help you to time major purchases so that you can not only get the equipment you need, but you can reap the maximum tax benefit for your business as well. Additionally, your CPA can help you to understand the true cost of deductible purchases. For example, if a new piece of equipment costs $10,000, this is only the upfront cost. If you’re taxed at 30%, after taking the deduction for the business purchase, the true cost of the equipment is only $7,000. This can help guide you in determining whether or not it’s a good time to make those purchases.
Benefiting from Retirement Contributions
Our business tax planners don’t merely examine the impact of tax law on your business; they’ll also examine your business income as a part of your personal return and help you to make important personal financial choices in relation to that income. We can help you determine if it’s beneficial to make contributions to your retirement accounts before the end of the year so that you can maximize deductions and minimize your tax bill.
By making tax planning a part of your business’s financial planning, you can get a better idea of what to expect in the coming tax season. You’ll be able to make smarter, more informed decisions regarding both your business and personal taxes so that you can get the greatest benefit on your return. Contact us for assistance with business tax planning in Provo, and we’ll help you get the maximum benefit on this year’s return while planning ahead for next year’s taxes as well.