Let’s talk about “tax aggression” and why every great Certified Public Accountant (CPA) has to be aggressive and assertive to save their clients money, just as I do.
What is tax aggressiveness?
Tax aggression means taking every single legal avenue to minimize tax liability—tax deductions and credits are just the start. We have to think bigger and broader.
Every business’s growth trajectory starts from a solid financial foundation. Optimizing your corporate income tax strategy reduces your tax bill and fortifies your overall financial standing. You need help on business and personal income taxes that goes far beyond preparation and a few credits. You need someone to take leadership. That’s what an aggressive CPA does.
1. Every dollar of tax liability is a dollar that isn’t making you money.
In tax and accounting, “aggression” doesn’t mean recklessness or dishonesty. Instead, it’s about adopting a proactive and strategic approach to tax reduction.
With an intricate understanding of everything from the earned income tax credit to the complexities of self-employment taxes, I’ve seen firsthand how a well-crafted tax strategy combined with strong financials can be a game-changer. It’s not just about keeping Uncle Sam happy; it’s about leveraging every penny to drive tax savings.
2. The amount of tax you save is tied to the priority you place on financials. I’ll be pushing for it.
If you want your business to succeed in a competitive market, you need to know how to run the operational side of your business in alignment with the financial side. It’s key to managing tax liability.
So, I’m aggressive in working with business owners to stay proactive. From tax reduction to capital investment and business structure to material depreciation and human resources, we’ll look at your business as a function of what you do and how we can make it tax-efficient.
3. Tax aggression is a passion for continual improvement.
It’s about being informed and strategic, not about deceit or evasion. This strategic approach includes utilizing tax credits like the health savings account and understanding the implications of depreciation.
We’re also going to cut down on the steep self-employment tax for LLCs and partnerships. That means aggression with respect to proper bookkeeping, so, for example, we can start turning your monthly disbursements into tax-deductible items like healthcare reimbursements.
Aggression leads to consistent improvement. So, how often can you pay yourself money that’s not included in your gross taxable income? To find the gold at the bottom, you need a CPA who will keep digging.
4. Experienced CPAs are aggressive because we know the boundaries before we push them.
A seasoned CPA is familiar with qualified medical expenses, mortgage interest, and charitable contributions—a wide variety of tax-saving strategies that contribute to lowering your business and personal tax burden.
It’s my job to keep abreast of changes in federal tax brackets, state and local taxes, and key legislation like the Tax Cuts and Jobs Act.¹ These legitimate opportunities are complex and wide-ranging. So, to put together the sheer breadth of tax-saving opportunities into a coherent plan takes determination, at the very least. Aggression, again, is the correct term.
5. What is aggressive tax planning? It’s a year-round process that looks for tax savings in every aspect of life, from business to personal.
Effective tax planning involves understanding the impacts of different tax rates, deductions, and retirement accounts—such as traditional IRAs—on your business’s taxable income. Small businesses must be cognizant of how social security contributions, marital status, and filing jointly or individually can influence their tax returns and total taxes paid.
What is tax aggressiveness? It’s tax aggression in tax planning—assertive recommendations and strong financial leadership. It’s your CPA encouraging you to participate in the tax planning process and explaining why it’s necessary.
To follow through on strategies, both parties need to be involved. Aggression here means taking the necessary steps to ensure clients maximize savings.
Every dollar paid in taxes is a dollar not contributing to business growth.
How much tax you pay affects everything from your capital gains strategy to your decisions regarding loans and financing. I have to be aggressive to understand how different investments and loans raise or lower your gross taxable income. Precision and expertise are required, not optional; they’re essential to maximize tax savings.
Elevate your business with expert tax planning.
I’m ready to answer the question of what is tax aggressiveness with results. Schedule a discovery call today.
Talk soon,
Jeremy A. Johnson, CPA
References
- IRS. Tax Cuts and Jobs Act: A comparison for businesses | Internal Revenue Service [Internet]. Irs.gov. 2017. Available from: https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-a-comparison-for-businesses