Tax planning
What's the difference between tax planning and tax preparation?
Tax preparation is filing an accurate return for a period that has already closed. Tax planning happens during the year and looks ahead, aiming to structure income, expenses and entity decisions to reduce the eventual tax bill.
Many businesses only engage with a provider once a year, at filing time — which is tax preparation, not planning. Proactive tax planning typically requires a relationship that runs year-round rather than a once-a-year filing.
Commonly explored when
- Profit has grown enough that last year’s tax bill came as a surprise
- A major purchase, hire, or entity change is being considered
- The business has only ever done once-a-year tax filing, not planning