Tax planning considers the tax implications of individual, investment, or business decisions, usually with the goal of minimizing tax liability.  Although most decisions are rarely made solely on their tax impact, you should have some knowledge of the income or estate tax issues and costs involved before making those business decisions.

A major goal of tax planning is minimizing federal income tax liability.  This can be achieved by:

  • Reducing taxable income through income deferral or shifting
  • Deduction planning
  • Investment tax planning
  • Year-end planning strategies

If you choose to give away wealth, during life or at death, you may incur federal taxes.  You can help protect the assets you transfer from excessive depletion by understanding these taxes and the various strategies you can use to minimize them. 

Tax issues are never far from the mind of the business owner, and it’s unlikely that many of the decisions you make will be tax based.  It starts with the formation of your business and continues through the sale.  Your choice of business entity, how you pay out profits to the owners, and your accounting decisions will all have an effect on your tax liability.

This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Investors should consult with a tax or legal professional regarding their individual situations.