Tax planning includes conceiving and implementing various strategies to minimize the tax paid in a certain period of time. For a small enterprise, reducing tax liability can provide more funds for expenditure, investment or development. In this way, tax planning can become the source of working capital. According to the entrepreneur magazine Small Business Consultant, two basic rules apply to tax planning. First of all, small businesses should not incur extra expenses in order to get tax relief. Although it may be a valuable tax planning strategy to purchase necessary equipment before the end of the tax year, unnecessary purchases are not recommended. Second, small businesses should try to postpone tax payment as much as possible. Deferred tax payment enables enterprises to use the money without interest, and sometimes even earn interest until the next tax payment is due.

Experts suggest that entrepreneurs and small business owners hold formal tax planning meetings in the middle of each tax year. This method will give them time to apply their strategies in the current year and allow them to make progress in the next year. For small business owners, in order to save money, it is very important to keep personal awareness of tax planning issues. Even if they employ professional bookkeepers or accountants, small business owners should carefully record their own tax preparations in order to take advantage of every possible opportunity to reduce and save taxes. "Whether you seek outside help or not, you should understand the basic provisions of the tax law," Albert B. Ellentuk wrote in the Guide to Tax Planning for Small Enterprises in Laventhol and horvath. Just as you won't give your money to others for management, you shouldn't blindly let others bear your tax liability completely. In addition, as Frederick W. Dailey wrote in his book "Tax Knowledge of Small Enterprises", "tax knowledge has strong profit potential. Understanding the tax law can bring you a much better bottom line than those competitors who are too lazy to learn. "

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