Why are you paying so much in taxes?
Here is a statistic that will make you mad: 55% of the corporations in this country
, big business corporations, pay no taxes at all.
Did they make a profit? Well, that depends on how you look at it. The real question is, did they make taxable income? The answer for these tax avoidance corps is decidedly no! Worse yet, if you look at what Corporate America actually contributes to the tax collector, the stats are amazingly low.
This we all know to be the truth. They pay large fees for expert tax advice that saves them a fortune while we at the lower end of the ladder, the small business owners pay far more than our fair share.
Another factor involved in this unbalanced situation is that frequently it costs money to make money. Beyond merely paying for expert advice on how to organize to pay less of a tax on earned income, many sophisticated maneuvers that result in lower taxes are very costly to implement and thus, are out of reach of the average small business owner.
However, I have discussed this matter with many small business owners and I believe at the heart of this issue is the reluctance of accountants to be real tax advisers and to help their small business clients arrange their business to best take advantage of available strategies that would allow for a lower tax bill. I see many, many accountants merely take the numbers from the client off their QuickBooks files and just dump them into a tax preparation program and out comes the bill. No planning, no real review, no reconsideration, just in and out and you pay, big time.
I still see accountants who are 'afraid' to take home office expenses, and other traveling and entertainment allocations as they do not want to trigger an audit they say so they have their clients overpay... now that is a service we all want to subscribe to and pay for... Let's not take allowable deductions and thus pay more than we should because the accountant may not want to trigger an audit. Yet I hear this all too frequently.
When asked, the accountants usually say something about keeping their bill affordable and that their clients really do not want to pay for tax advice and planning. I hear small business owners wanting to pay as little as possible to get their tax return done so they shop price not service.
In the end, it s the responsibility of the small business owner to achieve the best bottom line results he can. Paying a larger than necessary tax bill is not conducive to such a goal.
In short, just because your accountant has done your taxes for twenty years and knows you and your business and charges little for the service, it is time to get smart and shop for and pay for competent tax planning advice, not after the year is over but in the beginning of the year when there are strategies that can be implemented to yield the best results possible.
You all work far too hard and risk far too much to end the year pay a larger percentage of your profits to the government than you are obligated to. Let's take a lesson from the big guys, pay for and enjoy the benefits of sophisticated tax planning. It works, it pays for itself many times over and it is not about stretching the code and living in risk, it is about using the code and paying less. Not every accountant can perform this task. Get one who can.
Why are you paying so much in taxes?
By: Don Todrin
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