Advantages of Corporate Tax Planning

Posted by RobertPattinson on September 12th, 2019

End of the tax year can give you a lot of stress as you start thinking about what would happen if you were able to write off something, or if you had more deductions. Saving on taxes in the eleventh hour may seem impossible. However, you can still gear up for some savings in the next year.

You will have to be attentive towards your tax deductions and taxable items. By working on your taxable items throughout the year, you can save money. Corporate tax planning in Croydon gives you advantages which you cannot find somewhere else.

Plan With Your Mind

Tax planning should be thoroughly reviewed before the start of the tax year. It helps you set your goals and achieve them in a way to maximize your tax benefits. For example, if you are planning to sell something, you should plan the time when you will be selling it. Second hand sales affect the price of the item and it serves as a loss. You can use such write-offs when your income is climbing and you are in need of balancing it out. On the other hand, you can also plan clearance sales as it can also offset the extra income.

Apart from selling out your items, you can also plan your loans. Interest on the loans helps you write off the cost of the interest. You can get the maximum benefits from interest deductions if you time your loan properly. However, you cannot use this technique if you are having a strong year with peak income. As taking loans during peak income does not make any sense. Therefore, you should use this strategy only when the peak income drops. You can take loan as a part of new marketing strategy or expansion and thus, get the benefits of tax deductions.

Salaries & Payments

When you are running a corporation, you can save taxes in other ways as well. Corporate tax planning in Croydon can help you save on taxes using your Human Resources department. You can defer your own salary at the end of the year and pay yourself in the next month i.e. after end of tax year. This strategy should only be used if you have made more money than your usual income during a tax year. As deferring your salary to next month can affect the next tax year.
Similarly, you should also be focused on your payments and liabilities. Small businesses take help from Bookkeeping and accounting Company in Croydon which help the business owners understand the basics of taxation. You can make quarterly estimated payments if you have proper tax planning. These accurate estimates help you in avoiding penalties for underpaying taxes.

Warehouse Check

You can also check your warehouse and see if any inventory is sitting there for too long. Corporate tax planning in Croydon allows you to donate excess inventory as storing the inventory costs you. You can schedule a year-end donation of excess inventory and hence, lower your taxes.