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Nothing is Certain Except Death and Taxes – Managing Your Taxes

Small Business FinanceOriginal quote by Benjamin Franklin. Today, Franklin’s now famous quote still rings true.  The phrase speaks of the inevitable, and it is a fact that taxes are a critical element of any company or individuals considerations.

With the economic situation teetering on the brink of serious crisis in many countries and budgets gripped like never before, everyone is working that little bit harder – from the business and business owner to the governments’ tax collection agencies.

Times are Tough – Tax Collection is Getting Tougher

One problem that has real impact on the finances in many countries tax is avoidance.  Public agencies have established a process for compliance and enforcement, however, avoidance and error is still costing billions in lost revenues every year.  Detected fraud and tax avoidance are actually at higher than ever before throughout the United Kingdom, Europe, and the United States.

So, how does governments go about tackling problems with tax?  First and foremost, the tax gap needs to be identified.  In other words, the difference between the amount of money collected, and the amount that should be collected, needs to be identified – The difference can be the cause of outright criminality or error on the part of taxpayers.  When errors or loopholes are detected, actions need to be taken to close the gap.

How to Deal With the Inevitable

Technology and the evolution of the tax collection process have allowed governments and tax agencies to reduce tax fraud as well as picking up on inadvertent errors.  Although it may be up to the government to implement and uphold tax laws, the small business and individual taxpayer also has some responsibility beyond simply paying their taxes.

What ever the government perspective, most businesses and business owner accept the inevitable. They will be carrying their share of the tax burden. The question is how to pay as little as possible, and how to do this with the least amount of distraction and hassle.

Managing Your Taxes – Be Proactive, Be Accurate

It is important to stay on top of tax affairs to avoid unwanted fees and possible legal actions on the part of the government.  Tax evasion does come at a price that may include not only paying back taxes and interest, but also the potential of disruptive investigations, fines and jail time in the most serious of situations.

For a an individual trader, free lancer or small business, an umbrella company may be a solution for managing your taxes.  Because tax rules and regulations together with the administration process can be quite confusing, it is easy to inadvertently avoid paying the proper amount of tax.

Using an umbrella company, the company or individual absorbs the responsibility of administrating and reporting the business or individual’s taxes throughout the year.  For individuals this could include personal taxes, inheritance taxes, and everything in between.  For businesses, all taxes and other administrative needs can be met by such an arrangement.

One thing is certain.  If you are in business and trading, managing your tax affairs pro actively and accurately will save you a lot of time and hassle in the long run.

This article was contributed by Dave at the Publisher Network.

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