An accounting service for a small business in Weston is crucial to helping entrepreneurs get their taxes in order. For instance, as a proprietor, expert accountants can help you understand the difference between tax evasion and tax avoidance.
Tax avoidance refers to methods in which an individual or a business attempts to lower the taxes they owe the Internal Revenue Service every year. Tax avoidance is one of the factors responsible for the complexity of the United States Tax Code, as the concept is written into the law itself.
Tax avoidance is legal because the taxpayer is leveraging opportunities provided by law to reduce their payments to the IRS. These deductions incentivize paying taxes, encourage people to declare their income, and spur investments.
You have plenty of tax deductions to claim if you know what to look for. These include:
The IRS accepts the following startup costs as deductible: research and development, patent expenses, interest paid on real estate, travel expenses, meals, etc.
Basing your business at home makes you eligible for several cuts. You can, for example, take off a certain amount per square foot of space you use as an office from your annual taxes. You can also claim discounts based on your upkeep expenses, including mortgage payments.
As a business owner, you must document all your expenses, so it’s just a matter of vetting through with your accountant when it’s time to file taxes.
Tax evasion is simply avoiding taxes by dishonest means. The main form of tax evasion is to declare incorrect revenues. Another method of tax evasion is to channel money to offshore accounts where they are, theoretically, immune from United States law. The law considers the act a crime and defines specific penalties for violators.
Take the guesswork and potential criminal liabilities out by hiring an accounting firm to build your income tax reports. Contact us now.