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9 Basic Rules of Tax Planning - Why Sanjiv Gupta CPA firm focuses on doing the right thing?

  Sanjiv Gupta CPA  Published 
9 Basic Rules of Tax Planning - Why Sanjiv Gupta CPA firm focuses on doing the right thing?

If you are interested in paying lower taxes than you should consider doing tax planning. 

This United States of America has some of the most innovative and flexible systems that are designed to encourage entrepreneurship & building wealth.

 However, this doesn't mean that there aren't any rules. One must keep in mind that even if they are taking advantage of any tax credit or deduction, a tax plan can only be effective if they follow certain rules which are listed below:

1. The taxpayer should have a source of legitimate income. This means that dividends from stocks or interest from bank accounts can help individuals file for deductions, but this also means that unemployment benefits and social security cannot. In addition, the funds for the deductions should be real and not imaginary or money that was legally acquired through illegal means.

2. The taxpayer must follow the proper taxation procedures when filing for a deduction. This includes applying for licenses if needed and filling out all relevant forms in their entirety, since incomplete information could result in an audit by authorities and penalties which can take up half of the deduction.

3. The deduction should be relevant to the taxpayer's work or their line of business, since anything unrelated could lead to them being audited for fraudulent claims.

4. A tax plan must not interfere with any existing state or federal tax schemes, since this is a surefire way of getting into trouble with the authorities and paying large fines.

5. A plan must be relevant to the taxpayer, meaning that they should have a reasonable goal in mind when working on their deductions and not try to cheat the system for no good reason.

6. A deduction must be suitable to the taxpayer's line of work and should not interfere with authorities' right to monitor or set any kind of regulation that is related to their business.

7. The taxpayer must be diligent and efficient in all aspects of their work, since this would allow for them to take advantage of every opportunity that  is given to them, whether it is by the authorities or through legitimate deductions.

8. A deduction scheme must be reasonable and workable for all parties involved.

9. The scheme must not lead to an unfair advantage over other taxpayers doing the same line of work, since this could interfere with authorities' right to monitor and implement regulations on their  line of business.

If you are interested in tax planning, it is important to remember these rules if you want your deductions to be successful and result in financial gain down the road. You can guarantee that these deductions will be worthwhile if you follow all of the rules and understand what you are doing, since trying to cheat this system without knowing what you are doing can result in major losses.