Those unfamiliar with the tax code and the job of a tax accountant might think the phrase “avoiding paying taxes” is something nefarious. It’s not. It’s a business reality that any company or individual should avoid paying taxes as much as possible. This usually entails seeking all the legal deductions and loopholes available and utilizing them as best as you can. It also means looking for legal ways to reduce your taxable income and therefore paying the lowest amount of taxes possible.
A good tax accountant and tax lawyer can help in this regard, since as we all know the U.S. Tax Code consists in volumes of books that contain law after law, detail after detail, and gray area after gray area. It is a very complex task to wade through these laws, especially if you’re a larger company that conducts business in many locations. You need a professional to help you understand the intricacies of tax code as it pertains to your industry and business.
Yet to the extent that companies use the current tax laws to their advantage, they should. I am not suggesting that anyone should learn to abuse the system or do anything illegal, but they should work within the law to get the best outcome for their business.
The flip side of this, however, is tax evasion. This includes lying about your income and expenses, taking deductions you’re not entitled to, and other acts in violation of the tax code to evade the taxes you legally owe. That’s wrong.
Proper tax planning can help you avoid taxes versus evading taxes. A knowledgeable tax accountant is worth her or his weight in gold, and your tax savings can more than pay for her or his expert assistance.