The yearly tax bill to any businessperson will be decided based on their annual profit. When your company has made good amounts in an academic year, it is understood that the IRS will surely love it when you get to share some of this profit with them in the form of the tax amounts. The best way of reducing such tax liabilities is by making the right planning.
Many companies in Pasadena are serving the accounting needs of the businesses and the most preferred one is the Pacific Accounting group. This tax planning Pasadena Company is the one-stop destination of every businessman that requires help in managing the finance of their home or business.
Tax Planning Basics
Tax planning means that you will be saving some money that will be otherwise used as the tax amount per annum. Some of the basic ways of saving some money include:
- Reducing the Adjusted Gross Income or AGI
- Tax deduction leverages
- Advantages of tax credits, and so on.
The best way of making sure that, you do make it to the tax deductions per annum is by setting aside the tax amount beforehand and never feeling tempted to use that amount anytime.
If you are not sure about how to proceed further with the tax planning, then you can always recruit the help of a tax advisor. They can be your helping aid in coming up with the best plans for tax planning. You can easily reach all your financial goals with their help.
What Strategies Work
Here are some of the strategies that work perfectly for financial maintenance.
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Lowering the AGI
Contributing to the 401(K) when you are an employee is the best way of lowering your AGIs. Adjustments are another way of lowering the AGI. Here, you will not be itemizing the adjustments on the first page of your tax report, but somewhere in the long list of pages. The deductions can include,
1. Traditional IRA contribution
2. Some of the expenses such as the education fees, student loans, tuitions, etc., can serve as an added benefit for lowering the AGI
3. Contributions to the self-employed pensions such as SEP IRA or SEP, and so on
4. Self-employed taxes
5. Contributions to the health savings
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Deductions in Leverages
When you are done with the income adjustments, next comes the taxable income. Leveraging deductions can help in lowering your taxable income. Some of such leveraging deductions include:
1. Marketing expenses
2. Technology purchases
3. Travel expenses
4. Maintenance costs
5. Attending the conference and trade shows and their costs
6. Insurance
7. Some of the expenses such as internet, utilities, and phone expenses
8. Postage and packaging and other such shipping costs
9. Mileage expenses
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Corporate Entertainment Expenses
A tax statement can include entertainment expenses. These savings can offer extra profit to the company, and in turn, minimize their responsibility. A suitable environment for business discussions is preferred in this case.
You can find many such strategies that can help in the perfect tax planning in an academic year. Make use of all such options and make the right decision.