1、 Tax planning Abstract City economy strengthen interests consciousness of enterprise , maximize goal around interests, enterprises administrators, a generality question paid close attention to frequently is: How could enterprises pay the least tax revenue. With the constant perfection of the tax sys
2、tem of our country, enterprises are pushed to the overall tax revenue and restrained the market competitive environment under. Because the illegal activities should bear corresponding legal liability , then seek to pay taxes and become a kind of management and administration and pay attention to the
3、 fashion legally little, the tax revenue is prepared can prevail under such a background formally. In recent years, of our country many enterprise is it set foot in tax revenue prepare field , but no matter theoretical system or practical experience that tax revenue prepares to begin, it is still ve
4、ry immature . So, this text attempts to prepare the concept and say from the tax revenue, through preparing to carry on relevant analysis to the tax revenue, let readers have preliminary understanding to it. Quote a large number of instance expound the fact tax revenue prepare the impact on enterpri
5、ses financing, emphasize function and importance that tax revenue prepares. Since important, how that tax revenue of our country prepares the current situation , this causes the thinking of the analysis of preparing current situation of the tax revenue and lagging reason of this text, development co
6、untermeasure and effective way of trying to find out my tax revenue of our country and prepare at the same time , development by promoting the tax revenue of our country to prepare. Keywords:Tax planning；The importance； Current situation analysis；Development countermeasure There are several general
7、areas of tax planning that apply to all sorts of small businesses. These areas include the choice of accounting and inventory-valuation methods, the timing of equipment purchases, the spreading of business income among family members, and the selection of tax-favored benefit plans and investments. T
8、here are als Tax planning involves conceiving of and implementing various strategies in order to minimize the amount of taxes paid for a given period. For a small business, minimizing the tax liability can provide more money for expenses, investment, or growth. In this way, tax planning can be a sou
9、rce of working capital. According to The Entrepreneur Magazine Small Business Advisor, two basic rules apply to tax planning. First, a small business should never incur additional expenses only to gain a tax deduction. While purchasing necessary equipment prior to the end of the tax year can be a va
10、luable tax planning strategy, making unnecessary purchases is not recommended. Second, a small business should always attempt to defer taxes when possible. Deferring taxes enables the business to use that money interest-free, and sometimes even earn interest on it, until the next time taxes are due.
11、 Experts recommend that entrepreneurs and small business owners conduct formal tax planning sessions in the middle of each tax year. This approach will give them time to apply their strategies to the current year as well as allow them to get a jump on the following year. It is important for small bu
12、siness owners to maintain a personal awareness of tax planning issues in order to save money. Even if they employ a professional bookkeeper or accountant, small business owners should keep careful tabs on their own tax preparation in order to take advantage of all possible opportunities for deductio
13、ns and tax savings. Whether or not you enlist the aid of an outsider, you should understand the basic provisions of the tax code, Albert B. Ellentuck wrote in the Laventhol and Horwath Small Business Tax Planning Guide. Just as you would not turn over the management of your money to another person,
14、you should not blinfly allow someone else to take complete charge of your tax paying responsibilities. In addition, as Frederick W. Dailey wrote in his book Tax Savvy for Small Business, Tax knowledge has powerful profit potential. Knowing what the tax law has to offer can give you a far better bott
15、om line than your competitors who dont bother o learn. General Areas of Tax Planning o some areas of tax planning that are specific to certain business forms i.e., sole proprietorships, partnerships, C corporations, and S corporations. Some of the general tax planning strategies are described below:
16、 ACCOUNTING METHODS. Accounting methods refer to the basic rules and guidelines under which businesses keep their financial records and prepare their financial reports. There are two main accounting methods used for record-keeping: the cash basis and the accrual basis. business owners must decide wh
17、ich method to use depending on the legal form of the business, its sales volume, whether it extends credit to customers, and the tax requirements set forth by the Internal Revenue Service (IRS). The choice of accounting method is an issue in tax planning, as it can affect the amount of taxes owed by
18、 a small business in a given year. Accounting records prepared using the cash basis recognize income and expenses according to real-time cash flow. Income is recorded upon receipt of funds, rather than based upon when it is actually earned, and expenses are recorded as they are paid, rather than as
19、they are actually incurred. Under this accounting method, therefore, it is possible to defer taxable income by delaying billing so that payment is not received in the current year. Likewise, it is possible to accelerate expenses by paying them as soon as the bills are received, in advance of the due
20、 date. The cash method is simpler than the accrual method it provides a more accurate picture of cash flow, and income is not subject to taxation until the money is actually received. In contrast, the accrual basis makes a greater effort to recognize income and expenses in the period to which they a
21、pply, regardless of whether or not money has changed hands. Under this system, revenue is recorded when it is earned, rather than when payment is received, and expenses recorded when they are incurred, rather than when payment is made. The main advantage of the accrual method is that it provides a m
22、ore accurate picture of how a business is performing over the long-term than the cash method. The main disadvantages are that it is more complex than the cash basis, and that income taxes may be owed on revenue before payment is actually received. However, the accrual basis may yield favorable tax r
23、esults for companies that have few receivables and large current liabilities. Under generally accepted accounting principles (GAAP), the accrual basis of accounting is required for all businesses that handle inventory, from small retailers to large manufacturers. It is also required for corporations
24、 and partnerships that have gross sales over $5 million per year, though there are exceptions for farming businesses and qualified personal service corporations such as doctors, lawyers, accountants, and consultants. Other businesses generally can decide which accounting method to use based on the r
25、elative tax savings it provides. INVENTORY VALUATION METHODS. The method a small business chooses for inventory valuation can also lead to substantial tax savings. Inventory valuation is important because businesses are required to reduce the amount they deduct for inventory purchases over the cours
26、e of a year by the amount remaining in inventory at the end of the year. For example, a business that purchased $10,000 in inventory during the year but had $6,000 remaining in inventory at the end of the year could only count $4,000 as an expense for inventory purchases, even though the actual cash
27、 outlay was much larger. Valuing the remaining inventory differently could increase the amount deducted from income and thus reduce the amount of tax owed by the business. The tax law provides two possible methods for inventory valuation: the first-in, first-out method (FIFO)； and the last-in, first
28、-out method (LIFO). As the names suggest, these inventory methods differ in the assumption they make about the way items are sold from inventory. FIFO assumes that the items purchased the earliest are the first to be removed from inventory, while LIFO assumes that the items purchased most recently are the first to be removed from inventory. In this way, FIFO values the remaining inventory at the most current cost, while LIFO values the remaining inventory at the earliest cost paid that year.
