You’ve probably heard the old saying about death and taxes: Noone escapes either. In the case of taxes, at least in the U.S., you are required to pay your fair share as set out in the IRS tax code, but not a penny more. One of the best ways to ensure that you are paying too much is to conduct proper tax planning. If you don’t have the time or expertise to plan and prepare your taxes, it may be a good idea to partner with quality financial professionals Bronx NY.
The IRS Tax Code: A Real Behemoth
The federal tax code is a large and ever-changing document that stipulates the rules and regulations regarding the government’s official and legal collection of taxes. According to some sources, no one really knows how large it is, although most counts enumerate it at over 6,500 pages.
Being aware of those portions of the tax code that will enable you to legally lower your tax burden makes you truly tax-savvy. It pays to keep up with those portions that directly affect your personal finances, or if you are a business person, your company, or your firm.
Tax Planning: Your Best Legal Defense Against Paying Too Much In Taxes
Why is tax planning important? For one thing, it is absolutely essential in order to take advantage of the many ways to minimize your tax liability. Many of the legal deductions or credits that you can take require detailed and accurate record keeping. Unfortunately, some people try to “manufacture” the records they need at tax time. This is not prudent. Instead, planning for and keeping good records is something to be done throughout the year, not just in April.
The last thing you want is an IRS tax audit. Although a very small percentage of tax returns are actually audited, if you are one of the unlucky individuals to incur one, it can be a big headache. Major causes of an audit include mathematical errors, filing the wrong forms, underreporting income, and being dishonest. Most, if not all of these items can be nipped in the bud by proper and year-long tax planning.