What is tax planning?
The goal of tax planning is to maximize tax efficiency and minimize tax liability in every aspect of your finances. This includes taking into consideration the timing of income, planning for expenditures, and the timing of purchases.
What does tax planning cover?
There are three key aspects of tax planning that affect all aspects of your finances — investing to reduce taxes; planning your finances to incur the least amount of tax; the process of tax filing.
Why is tax planning important for businesses?
Simply put, tax planning strategies help businesses achieve their goals. For both large and small businesses, tax planning plays a vital role in lowering the amount of taxable income and thereby reducing the tax rate, and channeling taxable income to different investment plans. Proper tax planning also aims at conforming to tax law in a way that minimizes the incidence of litigation.