How We’re Flipping Tax Planning On Its Head
Written by Amanda Bower | Published: January 18, 2023
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Reinventing the Tax Model: A Strategic Approach
Tax season isn’t the most wonderful time of the year. From solopreneurs to corporate executives, just about everybody has experienced stress and frustration during a traditional tax season.
And guess what? The traditional tax model is mostly to blame.
Think about it: Many tax practices only focus on their customers for a few months each year. The rest of the time, they’re doing very little to prepare business owners for the challenges and complexities that burden one small portion of the year. So it is no surprise that business owners face increased anxiety come tax time — and sometimes even the loss of money that could have been saved earlier in the fiscal year.
The good news is it doesn’t have to be that way. In fact, our team at hiline is actively reinventing how business taxes are handled.
We deploy year-round tax monitoring and management so your tax season can be stress-free. Oh yeah, we also make sure you’re getting all the tax savings you deserve!
Just ask any of our customers, and they’ll let you know that we’re more than a company offering them financial services — we’re true partners, and we put forth great effort to understand the ins and outs of your business. Why? So we can help you prepare for the future, conserve precious resources, and make well-informed business decisions at all times.
If you’re looking for tax planning experts who will provide hands-on strategic assistance, and adapt to the specific needs of your business, then look no further than our team at hiline. We’re passionate about being there for you in those “make or break” moments that matter the most to your business.
Why Once-a-Year Tax Support Isn’t Enough
Let’s be real: A bunch of people subscribe to the “once-a-year” school of thought. The natural tendency might be a reason like this: “Tax season is stressful enough, so why extend that anxiety over an entire year? I’ll just bite the bullet when tax time comes and be done with it.”
The problem is that such reasoning is deeply flawed — and for several reasons. For small business owners and corporate executives wanting to maintain a competitive advantage year-round, an annual focus on taxes won’t cut it.
Here are just a few reasons why that’s the case.
1. Taxes Deserve Year-Round Attention
Most business owners are in a perpetual state of financial planning. After all, they must constantly watch their cash flow, ensure that net revenue exceeds costs, and make command decisions when it comes to purchasing new assets for their company.
However, how often are taxes factored into the equation? With a “once a year” mindset for tax planning, it can be very easy to make critical business decisions without considering their tax implications…only to discover the true impact once tax time rolls around.
As just one example, think about a self-employed individual deciding how much tax they should withhold from their monthly income. If their work has slow and busy times throughout the year, and they calculate their withholding rate based on the slow times, they could be in for a shock come tax filing time — e.g., they owe a lot more than they thought!
Giving regular attention to your taxes can lead to smarter business decisions throughout the year. And what entrepreneur wouldn’t want that?
2. Tax Laws Can Change at Any Time
The reality is that tax laws are in a constant state of flux. They can change at the drop of a hat, either on the federal, state, or municipal level. And while many changes may only go into effect at the start of the next tax year, others may require prompt action for businesses to benefit from them.
Whether changes to tax laws involve income, capital gains, payroll, sales, or other areas, staying up to date on the latest news is always a good idea. Simply put: By monitoring tax news, your business can respond appropriately to tax changes. For instance, you may be able to take advantage of new tax credits or deductions or update your documentation process to comply with a new law (and thus avoid any penalty fees from non-compliance).
3. Year-Round Tax Strategy Helps Keep Everything Organized
One of the biggest reasons year-round tax planning is so important is that it will prevent tax preparation from becoming a hectic, ulcer-inducing task. You won’t have to worry about missing one or more key documents required to file your return.
You also won’t have to worry about missing the deadline due to unforeseen circumstances (like an illness or injury). Instead, all the paperwork will be organized and ready to go when the time comes — and you’ll have plenty of breathing room in case some emergency does come up at the last minute.
What Should Be the Goal of Tax Planning Strategies?
The goal of any tax planning strategy should be, as one site puts it, “to ensure that all elements work together to allow you to pay the lowest taxes possible.” Taxes are necessary, but that doesn’t mean you should overspend on them. Instead, through careful research and year-round monitoring, you can minimize your tax bill and save precious resources for your business.
In addition, tax planning strategies should help your company in other, less direct ways, some of which were mentioned in the previous sections of this article. A well-developed strategy will help you manage your finances more effectively, reduce your total capital outflow, and cut through the tax code’s complexity to identify key cost-saving opportunities.
This is where hiline comes into the picture. We’re flipping the traditional tax model on its head by introducing tax services that occur in an ongoing fashion. Since you need to make decisions that have tax implications throughout the year (not just during tax season), it only makes sense for our team of experts to provide continuous, year-round guidance that will help you make the best possible decision for your company.
Here are just a few of the ways we’re reinventing tax planning:
- Accurate and dynamic data. Our team will continue to adjust its financial reporting models to reflect the current state of your business, as well as any updates to tax laws that could have an impact on your decision-making process.
- Measurable results. We can help you set specific tax-saving goals and track your progress through regular reports. By monitoring your goals and how your decisions are helping you reach them, we provide a level of financial clarity that wouldn’t be possible otherwise.
- Exceptional adaptability. We work with startups and enterprise-level organizations — and we adapt our models to meet the needs of every customer. We don’t believe in “cookie cutter” solutions but are committed to providing you with the customized help your company needs and deserves.
How Do We Break Down Tax Planning Strategies?
It may seem like hiline’s year-round solution is too good to be true, but in reality, we’re able to maintain exceptional levels of efficiency and quality of service due to our structured approach to tax planning.
For example, we break down each tailor-made tax planning strategy into three main areas.
1. Business Structure
For example, the nature of your business entity plays a prominent role in determining whether you should make quarterly tax payments and, if so, how much. Most businesses (including sole proprietors, independent contractors, partnerships, corporations, and S-corporations) must pay estimated taxes.
However, some business structures are liable to “double taxation” — in other words, the business entity is taxed first, and then certain shareholders are taxed individually. (A C-Corp is a classic example of a double-taxed business structure.)
At hiline, we’ll ensure that your company is structured in the most advantageous way possible. Then, we’ll determine how to maximize your tax savings based on your business structure.
2. Tax Payment Planning
There may be several different methods for calculating your estimated taxes. Of course, the efficiency of those methods may vary depending on factors such as business growth, unexpected expenses, or windfalls.
Our team at hiline will choose the tax estimation method that promises the most accurate results. For instance, the easiest method for calculating estimated taxes is to reference your business’ annual income for the past year.
However, if your company has experienced significant growth since then, we may choose to use a customized forecasting model to determine the amount of each quarterly payment. (And again, since we’re monitoring your finances throughout the year, we’re in the best position to create those accurate forecasts!)
3. Cash Management
We provide up-to-date monthly financial reports for each client that help them manage their cash flow efficiently and avoid penalties for non-compliance with federal or state regulations. Since you can see a “snapshot” of your finances at any given time of the year — along with the wider context of their tax implications — you have access to the best perspective to make key business decisions.
The Best Tax Planning Strategies Take Place Year-Round
Tax planning should not be a “once a year” deal. Proactive, continuous tax planning helps business owners save precious money, stay up-to-date on tax law changes, and keep documentation organized for every tax season. And when business leaders have access to accurate, real-time financial data — including tax-related data — they can make well-informed decisions that grow their brand.
If you’d like to learn more about how hiline’s year-round tax planning services can help your business to grow, reach out to our team today to start the conversation. We’d be happy to answer any questions you may have!
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