Business owners need to take responsibility for ensuring they are doing everything they can to make sure their taxes are filed correctly, accurately, and on time. What many often overlook, however, is that it is also often up to them to optimize their tax reductions. A CPA can help clients include appropriate deductions and avoid mistakes that can land them in audit territory, but in most cases, they do not offer advice about tax planning and tax strategies. This can lead to a number of misconceptions that may, unfortunately, never be directly addressed or cleared up by your CPA. That is why we will discuss some myths that need to be debunked to help you increase your tax efficiency.
Tax strategies are illegal.
You can implement tax strategies that follow the letter of the law in all respects. The tax code is long, thorough, and sometimes complicated to understand – but within it are many exceptions or opportunities for citizens to legally reduce their tax burden. It is best to work with a tax professional to determine how to use these opportunities to optimize your taxes.
Tax planning will increase the risk of an audit.
Audits often occur when there is a big mistake or obvious irregularities on your taxes. Even small mistakes and oversights are usually overlooked by the IRS. It is their mandate to reclaim the highest amount of taxes possible, and that tends to mean going after the big fish. Tax planning is legal, and the IRS does not frown upon the practice.
When it comes to taxes, all I need is an accountant.
While it is correct that an accountant can assist you with many matters related to your finances and taxes, there are other services that they do not provide or have limited experience with. In order to ensure maximum efficiency when it comes to your taxes, a tax advisor and a tax planning service can greatly help you save money and grow your wealth.
My CPA will tell me everything I need to know to reduce my taxes.
In many cases, a CPA may not be able to take the time to assess your circumstances and provide you with a custom tax plan. They are focused on filing tax returns and other duties to their clients throughout the year.
The IRS tax code is your enemy.
Although many feel as though the IRS is out to get as much money out of them as possible, this is not true. There are many provisions that can benefit tax payers and business owners.
Tax optimization won't make a big difference.
Experts say that tax planning and reducing your tax burden can help you grow your wealth better than earning a higher income.
The cost of tax planning makes it not worth it.
Tax planning services are not reserved only for the top earners in America. Flexible solutions can accommodate various budgets and tax planning needs. You can save hundreds, thousands, or even millions of dollars.