If you are not careful in your planning, you may end up paying a fortune of money in the form of taxes, which can actually leave a serious dent on the overall income or profit of your business. No wonder hiring professionals like business plan consultants can be life-saving.

Following is a brief rundown on some of the tips and suggestions that you may find very useful, especially if you are starting a new business.

Choose The Most Suitable Structure For Your Business

You are strongly recommended to do a thorough brainstorming about the best structure of your business while you are planning to start a new business. Tax planning for a business is also crucial when it comes to finalizing on a specific structure. It is very important for you to understand that the US taxation rules vary significantly depending upon which business structure you are using – whether it is C-Corps, S-Corps, LLCs, partnership firms, or sole proprietorships. The best structure for you is the one that does not only meet your business requirements, but also something that gives you room to save more on taxes.

Ownership Vs Lease

You can save a substantial amount of money on property taxes, sales taxes, and other taxes if you choose to go for leasing instead of buying various properties. Whether you buy or lease properties, such as vehicles, equipment, and real estate, you pay almost the same amount of money in either case. That is the reason why many people prefer to have ownerships on such properties rather than getting them on lease. But, such decisions are often based on impulses, not on facts. Ownership can cause you to pay a much larger sum of money towards various types of taxes related to those properties. Therefore, while you are doing tax planning for a business, you must seriously consider about this aspect and make an informed decision whether leasing can be a good idea in your specific situation. Obviously, there are several other factors, such as estate planning, that you may want to take into account when making these decisions. Owning these properties and not properly documenting your plan for them in the future can make for difficult situations that could even involve an estate litigation lawyer for your loved ones to legally resolve. As with all aspects of your business, filing the proper paperwork and working with professionals is essential to proper documentation and bookkeeping.

Capital Gains Tax

When you sell real estate properties, bonds and stocks, you may be held liable to pay capital gain taxes provided you are not selling them at loss. It is however important to note that capital gain taxes do not automatically apply to you just because your business is holding a particular property. You become liable to pay this form of tax only when a capital asset is sold off because it is then when government can actually get an accurate assessment of the actual value of such properties. Therefore, you must do regular monitoring of how the value of those properties is appreciating during the period you are holding it. You must also wait for the right time to sell the same; the right time is the one when the properties gross the highest amount. While you are working on your strategies to do tax planning for a business, you must also keep an eye on how the laws change over time. For example, if the capital gains taxes are expected to be increased at a specific date, it will be wise to sell the properties before that date. This way, you can manage to achieve a much higher net profit even if you are selling it at a comparatively lower price than otherwise. Similarly, if you are considering buying a property, you should again wait for the right time.

Overall, it is crucial to do a thorough tax planning for a business. The success and failure of your business depends very much on how you have dealt with the taxation related issues while preparing your business plans

Discuss Things With Your Accountant

When the time for filing tax returns come closer, you must have a meeting with your accountant, where you must discuss various things associated with business tax planning with them. The idea is not just to review the current year’s performance but also set the projections for the next year. Pay special attention toward the kind of deductions that are available for you this year. The deductions you used last year may not necessarily be available this year also. Likewise, this time, you may also qualify for some additional deductions. Do a thorough research and brainstorming in this regard because tax deductions are something that can save you a fortune, which otherwise may just go to the IRS wallet. You may also have to change your tax strategies this year, especially if there have been some business related changes or changes on person front, such as the change in marital status.

Get Yourself Prepared For Premium Increases

If the health insurance premiums are expected to rise significantly in the coming year, you should consider increasing the deductibles and co-pays of your employees as part of your business tax planning strategy. You can enjoy several benefits by increasing the cash bonuses; for example, it can help you cut down the taxable income.

Deductions That Are Not Very Common

If you go through the legal documents regarding tax laws applicable in the United States of America, you will find that there is a very long list of deductions that tax payers can take advantage of. Though you may be well aware of the most common types of tax deductions because you have used it again and again every year, you may not have any idea about the least common deductions that you qualify for. As a general rule, any expenses that you pay for to ensure smooth running of your business is tax deductible. If you use a phone to talk to clients and vendors, the phone bills are deductible. If you use your car to perform business related works, any expenses associated with that car can be treated as a business expense and thus can be considered for tax deductions. Deductions, overall, must be an important point to consider while you are working on your business tax planning strategies.

Debt And Losses

You must have a system to document debts and losses related to your inventory. Your accountant may be able to give you business debt advice and tell you how to use those debts and losses for deductions. In order to ensure an accurate count, you are advised to have a system in your business that ensures documentation of all such inventory losses on a quarterly basis. Besides that, you are also recommended to keep proper records of several other things, such as collection-agency receipts, copies of mailed letters, e-mails, phone calls, and documents related to collection attempts.

Overall, when it comes to business tax planning, it can be a little complex and time consuming process. Make sure you have an expert and highly experienced accountant to assist you.