Is Tax Planning a Worthwhile Investment for My Business?
August 8, 2023
As a business owner, you have a lot to think about. No matter what it is you’re trying to sell, you must consider the tax liability that is required to ensure that your company remains successful. As part of your financial planning and strategy, you need to think about how much you plan to sell, how much you’ll be required to pay the IRS, and whether there might be any deductibles or credits you can take advantage of. Keep reading to learn why investing in tax planning is one of the most worthwhile measures you can take if you want to see your business succeed.
What Kind of Benefits Can Come from Tax Planning?
Tax planning is the most beneficial way to lower your tax liability and keep more money flowing into your business.
As a long-term approach for your business, you’ll find that by investing in a tax planning service, you will:
- Save time by being able to make proactive decisions about the future of your business.
- Be able to take advantage of the various tax deductions and credits ahead of time so that you can make appropriate changes that will allow you to reduce your tax liability.
- Have the opportunity to build a better business plan that allows you to allocate your funds and resources in the most lucrative way.
What Kind of Tax Planning Strategies Should You Consider?
There are various tax planning strategies you can consider when it comes to your business; however, the first and most important is that you find a trusted wealth management professional you can trust. Their knowledge, experience, and skill will make the process easier to navigate and understand.
You’ll also want to make sure that you:
- Look at the various deductions you can choose to help reduce your adjusted gross income (AGI). This will help to open more opportunities for tax credits.
- Consider fringe benefit plans for any employees you might have, as these can help reduce the employment tax.
- Make sure you are allowing for a pre-tax contribution to your retirement plan, as this will help to lower your tax bill because of the increased deduction.
- Choose the right business entity (i.e., sole proprietor, corporation, limited liability company), as each has positives and negatives that can affect your tax liability.
- Make sure the professional you’re working with also relies on the expertise of lawyers to stay abreast of any changes to the tax laws.
Running a successful business requires means having a good work ethic, but it also means knowing how to plan for the future. Consider investing in tax planning services so that you can avoid the heavy tax burdens while working to grow your organization.
About the Author
Taylor Steele, CFP®, CLU®, AIF®, EA* is a Wealth Manager and Managing Partner at Cadent Capital. Taylor obtained both his Certified Financial Planner™ certification and Chartered Life Underwriter (CLU®) marks. He is also an Accredited Investment Fiduciary (AIF®) and Enrolled Agent*. As one of the two second-generation owners, he is part of a team devoted to helping clients build better futures by making better decisions. If you’re ready to let us help you better prepare for the future, call us at (972) 777-4991 or visit our website.
Opinions expressed in the attached article are those of the author/speaker and are not necessarily those of Raymond James. All opinions are as of this date and subject to change without notice. Investing involves risk and you may incur a profit of loss regardless of strategy selected. The forgoing is not a recommendation, Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.