So, you want to save on taxes in 2019. Who doesn’t want it? It’s a matter of fact that higher-earning comes with higher tax liabilities. Taxes are by far the highest expense incurred by most people and the major reasons why every taxpayer wants to save a big on them. However, paying hefty taxes is unavoidable, but California’s tax expert find ample opportunities to help achieve a lower tax bill. According to the tax expert viewpoint, just like we plan everything for retirement, we should plan for paying taxes. But, the concern point is that most people know how to plan for retirement, but they’re unaware of tax planning as it is more subjected to taxation expertise and knowledge.
Simply put, tax planning is an analysis of the financial situation from a tax perspective to reducing tax liability. However, developing an effective tax plan is no way an easy task mostly because tax laws tend to be complex. But if you consider utilizing the expertise of Los Angeles tax professional to your advantage, you can greatly save on taxes.
Want to know more about efficient tax planning and using it to save on the higher tax amount? Here are some tax-saving secret for start-ups and business owners that will help reduce their tax liabilities and save more of the business revenue for them.
One of the most effective ways to reduce taxes for your business is by employing a family member or spouse to your business. With this little known secret of a tax specialist, business owners can pay a lower marginal rate or eliminate the tax on the income paid to their hired family member. Since you have to pay certain income to hired closed ones and this will be an expense to the company, so you become eligible to set this off from your business taxable income, This way you can reduce the total tax liabilities of the company.
Generally, the stock is valued at cost, but stock with shorter shelf life should be valued on the cost or NRV (Net Realizable Value), whichever is lower. NRV generates the actual realizable value of stock and, thereby, prevents overvaluation of stock, which ultimately reduces taxes further.
Tax credits are the government approach of encouraging businesses and individuals to do experiments or innovative things which work positively both for the company and environment. For example, you can ask credits for doing research, going green activity, hiring more employees, health coverage for employees and providing access to disabled employees.
Depreciation is one of the best ways for you to save a big amount on tax. All capital expenses incurred for business purposes should be made in the name of your company. For example, if you purchase a vehicle, desktop, furniture for business use, then bill it under the company’s name. You, as a company, can claim depreciation for these business expenses, at a different rate as prescribed under the IT act.
It is rightly said that a single penny saved is a single penny earned! Also, it’s understandable that you’re not a pro in saving taxes, however, being a responsible business owner, you can consider hiring a tax professional in California to record every small transaction in business in an appropriate manner and can help you realize the full potential of what you could be saving. Also, in most instances, the cost to hire a California’s tax professional will pay for itself with the amount of tax savings you can expect.
