The entrepreneur, especially in the case of sole proprietorships, in partnerships or in small companies, assumes responsibility for the performance of the company itself.

During the financial year the entrepreneur is inevitably faced with expenses that can be divided between fixed and variable. Although in general the former are more consistent and budgeted, sometimes the latter may even significantly affect the final balance.

This can also happen with taxes. In fact, the contribution load varies with the change in profits, taxable income and a whole series of other factors. However, the contribution paid on the basis of the gains earned is perceived by small and medium-sized enterprises in an extremely negative way, especially if the fiscal profit does not correspond to the real cash, even more if unexpectedly increased compared to the previous year.

But there is a way to avoid incurring completely unexpected payments. The discipline that has given an answer to this problem is called tax planning .

Tax planning basically consists of careful financial planning , which aims to draw up an annual plan to optimize the tax burden. Contrary to tax evasion, which consists in violating the law, and unlike the avoidance which, despite being at the limit of legality, has the simple purpose of paying less taxes, tax planning is a methodology that cannot be pursued as it completely legal and with legitimate intent.

It is therefore not a question of subterfuges but of simple financial planning.

Phases

Phases

The starting point for tax planning is first of all the study of the historian. The financial consultant’s task is therefore to carry out an analysis of the taxation of the previous year. From here, the tax planning discipline takes care of forecasting what lies ahead for the following year.

Secondly, tax planning uses a series of tools to draw up a plan to improve one’s position. Among these a leading role is played by management control, but also fiscal liquidity.

Primarily, tax planning is an invaluable tool but the main problem is linked to the fact that the entrepreneur is not aware of this possibility.

The accountant or financial advisor should be a resource on which the entrepreneur relies. His task is therefore to guide him through the intricate network of Italian taxation and offer him the best tools and the best solutions. Through tax planning it is possible to have a forecast of the fees to be paid, without waiting for the accountant to meet in total darkness.

Another advantage of tax planning is that of being able to forecast, through financial planning, the amount due to the tax authorities and to be aware of having to have those resources available. Without the slightest indication of the amount, in fact, the entrepreneur could be led to spend more than he should and then not have sufficient resources to play his part with the tax authorities, generating a series of chain problems, such as choosing from where to withdraw the necessary sum.

This is why among the services offered by Andrew & Sax Advisor there is a careful tax planning , which takes into account the identity and characteristics of the company, the earnings forecasts, the type of activity carried out and much more, in order to provide to the entrepreneur a base that also acts as a yardstick for all the expenses to be faced in the coming year.