Tax Planning- a must for corporate growth

Since every business is set-up to earn benefits and increase capital growth, we all want to save as much as we can with various ways. And corporate tax planning is another thing that every business owner must consider to increase revenues. No matter if you are a proprietor of a small business, a partner in a big company or a shareholder in a corporation; it is pertinent for you to understand the importance of tax planning.

The income tax system is based on a simple method that is pay-as-you-go and the authorities expect to receive some percentage of your annual earnings. However, we all want to save as much as we can from the income tax and this is where corporate tax planning can be helpful for your business. The professionals, offering tax planning, help you with ethical methods to mitigate any taxes due; when it is time to file your tax returns.

Some of the benefits of corporate tax planning include:

Reduces your taxable income and lowers your tax bill- One of the obvious benefits of tax planning is that this shows a reduced taxable income for both-individuals and business owners. Since your taxable income is reduced, you pay less tax. Your money is saved as a retirement plan. Though you cannot technically touch it until you are of retirement age, but you can tap into this money and not get penalized.

Increases benefits from expense deductibility - Another benefit of corporate tax planning is that you can get the maximum benefits from the expense deductibility if you keep the detailed records of your deductible expenses. Your corporate expenses such as property taxes, charity, tax preparation fees and investment expenses are all accounted for in the itemized deduction calculation. These reduce the taxable income figure on your tax return and lower your tax bill.

Differing salary- Tax planning also guides you well to defer your salary at the end of the year and save on taxes. For example, by paying salary in January and not in December, you can reduce the income of the particular year and hence you can save on your income tax.

Retirement plan- If you are a business owner and want to provide retirement plan to your employees and yourself as well, corporate tax planning is a great choice as you can save a lot by reducing your taxable income. Put more money away in your company retirement plan for yourself than for your employees. Since you are funding a specific benefit and have only few to do so, you can contribute more to the plan than the employees.

With all these benefits, it is easy to say that corporate tax planning can save a lot of your income that can be used for other investment plans or personal use. Though the taxes may sometimes feel as an unnecessary expense, but they are not. The corporate taxes can help you grow your business in one or other way. The better way to save money is corporate tax planning.