As tax laws continue to change and become ever more complex, tax planning has become more important than ever. There are many deductions and credits that cannot be used unless proper planning is implemented ahead of time. This is especially true for small business owners and this is the group that we really want to reach with our tax planning services. All big corporations have tax advisors that help them use deductions and credits effectively.
Small business owners deserve good advice, too!
For the small business owner who is paying both Self-Employment Tax and federal income tax and California income tax on every dollar of net profit, every deduction counts for a lot because the combined tax rate on profit can be quite high--40 percent is not uncommon.
A 40 percent tax rate on your net profit means that for every $100 deduction, you save $40 in taxes. A $1,000 deduction saves you $400. A $10,000 deduction saves you $4,000. Needless to say, with numbers like those, you need to know about every deduction to which you are entitled!
Also you need to know how to document your deductions, so that if you ever were audited by the IRS, you would not have a problem.
- Do you know how to create a "bulletproof" home office that allows you to deduct part of your housing expense on your Schedule C as a business expense?
- Do you know what vehicle expense is deductible and how to document business miles in a way that guarantees that your deduction will be acceptable in an IRS audit?
- Do you need a Solo 401K, SEP, or other self-employment-friendly form of retirement planning? What are the advantages of each, what are the disadvantages?
- If you buy new equipment, how should you deduct it? All in the first year or take the deduction over a period of time (depreciation)?
- If you hire a new employee, what impact will that have on your income taxes?
- Should you be paying estimated quarterly taxes? If yes, how much should you be paying each quarter?
These are the kinds of questions that we seek to answer when we sit down for a tax planning session with a small business owner. We always advise our clients to pay the appropriate taxes but we are not in favor of clients OVER-paying their taxes because they haven't done any tax planning.
Rich people engage in tax planning to manage their tax exposure, so why shouldn't you? It's good business.
Our small business tax planning sessions are extremely affordable, simply call our West Los Angeles office for a personalized quote; ask for Andy. A one hour session tax planning frequently results in tax savings of $500 or more.
Pronto Income Tax planning sessions are handled exclusively by Andy Frye, Kent Frye, or Casimiro Pena, who between them have a combined 78 years of working with small business clients just like you. Remember that we are small business owners, too, so we know what you are facing.
Schedule a tax planning session today. If we cannot do anything for you, we will tell you that within 5 minutes and you will be on your way with NO FEE.
If we see that we can help you, we will help you to the fullest of our abilities at an affordable rate.