Fiscal Deity: Tax Consultant

Strategic planning throughout the year results in a minimal tax balance. The objective of planning your tax payables is not to prevent paying taxes, it is to pay no more than your fair share of taxes, and keep your money where it earns you the most.

If you aren't aware of it yet, Uncle Sam pays no interest. If he deducts your tax payment monthly or quarterly, and takes more than his fair share, he doesn't give you anything back for the privilege of using your hard earned money. By the same token, if you don't pay in enough, he charges you a penalty and interest.

As a W-2 wage earner, if you are over paying your tax debt, you may be considering it a 'forced savings plan', but you gain nothing, using that particular plan. By putting the same amount in savings every year, earning interest on the balance, and continuing to regularly invest in your savings fund, you may be able to utilize the retirement savings plan reducing your tax debt significantly. With the advice of a competent tax consultant, your savings can become an investment with a tax reduction at the end of the year.

As a business owner paying tax quarterly, over paying your taxes can cost you considerably more. Your tax debt may actually be borrowed money, on a line of credit from the bank where you pay interest for the use of the money. If tax planning were part of your business expenses, you get to deduct the amount paid to the tax consultant from your business, you don't have to pay interest on more than you need to pay in (if using a line of credit to pay taxes), and any saved money can be placed in a retirement fund or savings plan to draw interest for you. Once again, a tax consultant can save you money.

These are just a couple of ways you can save money by hiring a tax consultant. So, who is your Tax Deity? Your tax consultant or Uncle Sam?

Copyright © 2005 ? Jan Verhoeff

Tax planning is an important part of setting up your business, working your job, or living in a world where taxes are a fact of life. Consider saving money on your taxes this year, by planning well, and paying yourself first. Visit eBiz Brand Performance for more information.

In The News:

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Wealth tax calculator: Try your hand at taxing the super rich  Vox.comSen. Elizabeth Warren (D-MA) recently proposed a wealth tax on the very rich as a way to curb wealth inequality. It's a simple 2 percent tax on fortunes over $50 ...
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KRA demands Sh10.3bn tax on SportPesa winners  Business DailyThe betting firm says the order issued by the Magistrate's Court on May 22, 2014, restrained it from deducting withholding tax from winners' cash prizes.
New York Millionaires Tell Albany: Tax Us, Please  The New York TimesA former BlackRock executive urged lawmakers in Albany to create a multimillionaire's tax to help pay for schools and affordable housing.
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Have four or more babies in Hungary and you'll pay no income tax for life, prime minister says  CNBCHungarian women that have four or more children are to be exempted from paying income tax for life, the prime minister has said.
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Ocasio-Cortez wants to raise the tax rate on high earners. The Tax Cuts and Jobs Act already did  Brookings InstitutionIn the 2017 Tax Cuts and Jobs Act, Republicans imposed a top tax rate between 60 to 70 percent on high-income corporate executives. Adam Looney argues ...
Netflix 'didn't pay a dime in state OR federal income taxes last year and even got a $22m REBATE'  Daily MailThe Institute on Taxation and Economic Policy said corporations like Netflix are still 'exploiting loopholes' under the Tax Cuts and Jobs Act. The streaming giant's ...
Are you on the right tax code for 2018/19? You could be owed HUNDREDS of pounds  The SunMillions of us don't bother to check our tax codes which could see us overpaying income tax by hundreds of pounds.
The super rich at Davos are scared of Alexandria Ocasio-Cortez's proposal to hike taxes on the wealthy  CNBCThe super rich attending Davos have misgivings about Ocasio-Cortez's proposal to boost the tax rate on earnings above $10 million to 70 percent.
Budget 2019: Tax system to be made more progressive and resilient  Channel NewsAsiaTax incentives will also be extended and strengthened to enhance Singapore's business competitiveness, Finance Minister Heng Swee Keat said in his Budget ...
Suspicious income tax refund claims under I-T Dept scanner  Moneycontrol.comMinister of State for Finance Shiv Pratap Shukla in a written reply to a question in Rajya Sabha said there has been an increase in detection of suspicious refund ...
Trump’s U.N. pick Heather Nauert withdraws over nanny’s work status, unpaid taxes  ThinkProgressState Dept. spokeswoman Heather Nauert, President Donald Trump's pick to be Washington's next U.N. ambassador, has withdrawn from consideration for the ...
Tax queries: Gifts received from a relative are tax-exempt  Economic Times"According to Section 56(2)(vii) of the Income-Tax Act, gifts received from relatives are not taxable. The specified list of relatives includes grandparents and ...

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