Most businesses in New Jersey, including small businesses, startups, and entrepreneurships have a business plan. They will need to have a business plan if they apply for a commercial loan through any type of financial institution. These same businesses may also use a business plan to structure future growth or when expanding into new markets or product or service lines.
What most businesses, particularly small businesses, do not have is a tax plan. Some business owners may assume a tax and business plan is one and the same thing, but they are actually very different ways of looking forward and planning for business financial success.
What is Tax Planning for Small Business?
With the assistance of a CPA, tax adviser or a business financial planner, a complete analysis of the business can be completed with a focus on reducing taxation and maximizing efficiency with taxes.
Think of a tax plan as a proactive and forward-thinking way of reducing the amount of taxes a business pays. It also provides a picture of the options for the company for financial management going forward, helping to limit tax liability while also considering the company’s goals and objectives.
Considering Deductions
In the development of the tax plan, the tax adviser and the small business owner should review the business plan. This may include any purchases of assets or changes to the structure or operation of the company which may impact tax issues for the current and upcoming year.
With expertise in current tax law, the adviser can be instrumental in assisting the New Jersey small business owner in making business decisions that can have a substantial impact on taxes, taking advantage of deductions and credits, and even setting up retirement funds in a way that benefits the company’s bottom line.