Grow Your Business Through Tax Planning
Most business owners are interested in tax planning because without proper tax planning, business owners may end up with huge tax bills, giving away their hard-earned money. Tax bill is often the largest expense of any business. However, tax planning strategies will not produce the desired outcome if you do not know or understand your overall financial goals for the long run.
An important thing to ensure is that your personal financial and investment strategies should always go hand in hand with your tax planning strategies as a business owner. As a business owner, you may have been running a very profitable business for several years, and you are now at a point where you want to save up for your retirement, which is a personal financial goal. Tax planning allows you to align this with your business goals.
Maybe retirement is not your main focus today, but you may want to save up for your kid's education. Hiring your kids could be an effective strategy to bring this to fruition as a business owner, as long as you establish bonafide employment with your kids. They do the work for you. You pay them. You claim those as salary and wages in your business; it is a tax benefit because they are business expenses that would offset your taxable income. And then, with the money you save for them, you can put it into their 529 plan that will benefit your kids. You can turn it into a tax benefit, and your kids will have sufficient education funds to go to school later.
The major takeaway today is tax planning would not make sense if you do not understand your financial goals. Business owners often come to us wanting to implement tax strategies to avoid paying taxes, but they lose sight of their overall financial strategies in the long run.
If you are looking for ways to reduce your taxes and at the same time be one step closer to achieving your financial goals, call us today at 832 295 3353 to speak to one of our small business accounting and tax planning experts for assistance.