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Saturday, November 21, 2020

Taxation Operation: 3 Crucial Things to Know About Tax Planning for Businesses

Let's face the facts: taxes are a pain for everyone. They can be difficult to file and a major drain on your finances - and as a business owner, you know that taxes will only hit you five times harder.

That being said, your business taxes would be a lot easier to manage if you focused on tax planning. Not only does planning out your taxes help you organize your files, but they can help speed up the filing process and can even help reduce the amount of money that you will pay.

This article will help you to learn some of the nuances of tax planning so your business can be ready for next season. Keep reading to find out more!

1. Ensure You Have a Proper Business Structure

The first step to planning out your taxes is to make sure you're in the correct business structure. Whether you're listed as a sole proprietor , an LLC, or a corporation, each fall under their own categories and definitions, and will also have an effect on the amount that you will pay in taxes. Ensuring that you have a proper business structure will help streamline the process of filing your tax documents.

2. Know Your Tax Bracket

One of the most important rules to planning out your taxes is to know which bracket your business is in. Too often, small businesses pay more than they should simply because they place themselves in a higher tax bracket than their business is currently worth. Make sure to do the research to learn your bracket so you can pay the amount in taxes relative to your business size and value.

3. Find Your Adjusted Gross Income

Your adjusted gross income, or AGI, is probably the most important part of your taxes. Unlike your gross income, your AGI is the part of your income that's actually taxable. This is basically the amount that you would have after making adjustments for loans and other payouts your business has had to handle throughout the fiscal year. Make sure to find your AGI so you don't end up paying more than you actually owe.

Now that you know what to expect out of your taxes, the next move is to start planning out your finances so that you know you're fully prepared for tax season. Professional tax planners like the Avitus Group can help you keep a track of your company's financial information so you know that every penny will count when doing your taxes!

Tax Planning Has Been Made Easy

Now that you know the important steps to tax planning, you'll be able to take care of your taxes for the upcoming year without a problem. Make sure to take a look through the rest of our site to see what other tips and tricks we have to offer you. You're going to love what you find here!

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