Why Reviewing Your Tax Strategy Makes Financial Sense
Businesses are regularly rewarded for creating a well-thought out tax plan from the beginning. Business opportunities and rules change can require different strategies in order to minimize taxes at year-end. New entrepreneurs often make the mistake of not counting taxes as an expense. Instead of paying attention to what is inevitable (which is paying taxes), they think they should wait to see if the business is a good or bad entity first. Staying informed and getting professional advice can help business owners make better decisions, which will pay off in the long run.
- Entrepreneurs tend to ignore tax planning in the initial phases of a venture, which can be costly.
- What most of these entrepreneurs don’t realize is that implementing a tax plan usually requires some restructuring resulting in tax consequences that could have been avoided.
- Once entrepreneurs realize that taxes are often a business’s largest expense which doesn’t provide any benefit like equipment, staff or services, then they understand how important tax savings are to the future growth of their business.
“To get the most out of a tax plan, it needs to be implemented before the business generates value and profits — value and profits need to be created within a tax-efficient structure to get the maximum benefit.”