What is tax planning?
Tax planning is a commonly-misunderstood concept which could mean massive reductions in your tax burden. Good tax planning strategies have literally made the difference in some of our clients keeping hundreds of thousands of dollars a year.
It’s that important!
Tax planning does not mean “tax evasion.” It doesn’t mean being “aggressive” or “shady.” It isn’t taking advantage of loopholes, or going into grey areas. Tax planning is totally legal, totally accepted and totally expected by the IRS.
Expected by the IRS?
According to the U.S. government, every year American taxpayers overpay their taxes by $1 billion due to missed tax credit opportunities. This is the subject of tax planning.
Bey & Associates’ mission is to help business owners and professionals keep more of their hard-earned money. Instead of throwing money at the IRS, why not help them invest more back into their own businesses? That’s good for them, that’s good for economy and that’s good for everyone. Many Americans consistently overpay their taxes each year without even knowing it.
Tax laws were written with small businesses in mind. There are many deductions and credits which have been made available for those running small businesses. However, if you’re not familiar with the tax codes, you can easily miss them.
These deductions and credits are actually built into the IRS tax codes and are backed up by court cases and legal precedents. If you know what you’re doing, there are so many totally accepted methods of reducing one’s tax burden, there is no reason to ever go into a “grey area.”
The basic concept of tax planning is that, rather than just wait until the end of the year and paying whatever taxes you owe, there are strategies that can be implemented ahead of time to reduce your tax burden. Applying sound tax planning strategies, our clients routinely save tens or even hundreds of thousands of dollars.
Examples of things to consider in creating a custom tax planning strategy:
- Make sure you are qualifying your home office as a business expense.
- Ensure you are maximizing your retirement.
- Set up the right type of corporate entity. One type isn’t right for all businesses. If that were the case, there wouldn’t be all the different types of entities available. Your exact circumstances can greatly affect the entity type you select.
- Sometimes it is best to set up multiple entities. Some entity types are better for protection, some are better to receive profits. Sometimes we recommend setting a business up with multiple entities types to serve different purposes.
- Find out how to maximize on meals, entertainment and travel.
- How do you make your medical expenses a business expense?
Tax planning isn’t magic or voodoo. It’s knowledge.
As a Certified Tax Coach, Kim Bey is one of an elite group of 200 CPAs nationwide who seek to work proactively instead of reactively. They view taxes as a challenge to embrace, not a headache to avoid. Because their approach differs so drastically from many CPAs, tax planning isn’t widely known to the broad population yet.
Often, accountants can be only compliance-oriented, focused on historical data rather than creating proactive strategies. Tax planning requires an in-depth knowledge of tax codes, including recent changes and legal interpretations from recent judicial decisions. As a Certified Tax Coach, Kim has access to a nationwide network of tax researchers. These provide her with current information on any number of extremely niche tax issues, enabling her to accurately address any situation that comes up.
Additionally, rather than simply attending a yearly convention for continuing education, Kim stays on top of it constantly throughout the year with regular case studies and and tax updates.
Knowledge is power and when you really understand the tax code you’re able to help people determine their own fate, structuring their life to greatly lower their tax liability.
And that’s the whole goal of tax planning: to put you in the driver’s seat.