Tax Sense is Great but Economic Cents are Better!

A lot of people don't like paying taxes. However, you should really look at your situation in a different light. If you're making money, you're paying taxes. Another way to look at it would be to consider the fact that if you're paying taxes, you're one of the lucky few with whom Uncle Sam wants to be a 50% business partner. If your partner Uncle Sam is getting paid, you're also most likely getting paid, barring a few exceptions.

That being said, our clients sometimes still ask us: "What's the best way I can save taxes." While it is important to have the appropriate planning in place to maximize the tax efficiency of your investment, purchase, and sale decisions, it is even more important to make business decisions based on good economics. In other words, it doesn't make cents to spend $1 to save 50 cents in taxes if there is no other economic benefit achieved from spending that $1. Consider how the extra $1 spent will help you grow your business, invest in the right machinery and equipment or provide better services and products to your clients, customers and community. If spending that extra money doesn't help your business, consider paying the extra tax and reducing your debt burden, increasing your cash cushion or building wealth. So next time you meet your tax adviser ask him or her: "Do my tax strategies make economic sense in addition to tax sense?"

Please note that every individual tax or economic situation is unique. Before you embark on any specific tax or financial position, it is important to consult your tax or financial adviser. The above isn't and shouldn't be construed as tax, financial or professional advice.