How Entrepreneurs Can Benefit from Smart Tax Planning with a CPA

Avoiding hefty fines for filing errors and inaccuracies isn’t the only reason why small businesses and entrepreneurs need to pay more attention to doing taxes. As any reputable CPA will tell you, tax planning yields plenty of advantages for your Nashville business. By analyzing your company’s financial situation from a tax perspective, you not only ensure tax efficiency but reduce tax liability as well. Here are some of the benefits you can look forward to.

Estimate Future Expenses

Tax planning can be extremely useful for predicting losses and expenses for growing companies. If you need to acquire new equipment or spend money for a business expansion project, you can take out a loan at the best time in terms of tax liability. Getting a loan when your peak income drops or near the end of the tax year will help you maximize tax deductions on loan interest. However, experts urge entrepreneurs to remember this rule of thumb: never incur additional expenses only to gain a tax deduction. It’s just not worth the risk.

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What the GOP Tax Overhaul Entails, According to a CPA Firm

After more than three decades, the U.S. senate approved the biggest overhaul in the tax system last December. Though the cut to corporate taxes might seem to be the most impactful element of the tax overhaul, a CPA firm will tell you that this is just one of the many things in the tax overhaul that may affect your business.

Under the tax overhaul, or the Tax Cuts and Jobs Act, modifications to the Internal Revenue Code, including changes to credits and deductions, have been implemented. Such modifications have been made in hopes of spurring economic growth. Businesses in Nashville, however, might face a different kind of tax overhaul in the near future.

How the tax overhaul will affect businesses

Perhaps the biggest change made by the federal tax overhaul is the provision lowering the corporate tax rate to a flat rate of 21 percent. By doing this, lawmakers hope to encourage large corporations to set up shop in the United States, thereby stimulating economic growth. Having said that, several factors are still at play before a foreign corporation can move to the US.

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