C Corp, S Corp, LLC, ESOP…Section 179, form 1120, schedule A, B, C…all of these are tax terms with which as business owners you are probably familiar. We are now in reality time when it comes to your taxes for 2008. By now you likely know what you owe to the government or you have confirmed the tax liability you already knew at the end of 2008. Each year the taxes you pay drain valuable cash from your business; therefore they are an important consideration for your company.

While the drain due to taxes is a fact, this should not be your only concern or even your primary concern as a business owner. Frequently I encounter business owners who spend more time worrying about taxes than they do their sales, profitability, cash flow, future business, product costs or new business development. More money can be made acquiring a new customer or product line, making an investment to pursue top line growth or reduce costs, or refinancing lending agreements than by focusing all efforts on minimizing taxes.

The best advice I can give about managing your taxes is to build a sound tax plan and stick to it. It is important to have your CFO and / or tax professional stay close to changes in tax legislation. Changes in tax law, particularly with the recent change in philosophy of the new administration, can have a profound impact on your tax planning. Once you have a plan in place to help minimize taxes, the best thing to do is to instruct your CFO to follow it and you can then focus on growing and moving your business toward the future.

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