Part of a company’s legal obligation is to file and pay their taxes in good time. The tax obligations increase with growth in the net profit of the business. However, with the help of qualified and experienced CPA’s like those working for Richard Wojcik, your business can engage in tax planning. What is tax planning and how can the business do it?
Tax planning is the process through which a business identifies how they can conduct their business within the law but still keep their tax obligations to the minimum. Tax planning is a deliberate and continuous effort by the business and therefore businesses should not wait till their taxes fall due so that they can begin the tax planning process. This means that the finance department or the outsourced CPAs should work closely with all other departments. But how does this happen?
First, you need to hire the right people for the right seats. The business should work with accountants who specialize in tax planning and who have the prerequisite experience to do it successfully. While you could work with an individual, it is better to work with a team with different strengths to create a synergy that will help the team to forge forward. The team should be composed of accountants and a legal team in order to ensure that everything has dined legally.
Secondly is to identify the strategies the business is going to use to achieve this. What loopholes in the law can you take advantage of? Most businesses take advantage of tax breaks and incentives given by the government, reduce their taxable income, lowering the effective tax rate and being in control of the schedule of tax payments. Depending on the industry and the level of business, the team will come up with a customs tax plan.
Executing the plan is the third and final stage. However, to do this successfully, the business should educate the employees in the finance department and the top management of how the strategy works and ensure that they understand their role in this. The execution plan needs to be well laid out and executed continuously for maximum effect. Remember that tax planning is a tool that any business can use irrespective of the industry and size.