Purposes of Taxation.

Financing government spending:.

Taxes are validated as they fund government expenditure and activities that are beneficial and necessary to society.
Reduce gap between rich and poor.

Progressive taxation can be used to reduce inequality in a society. According to this view, taxation in modern nation-states benefits the majority of the population and social development. Progressive tax system where higher income groups have to pay more tax is an effective way of reducing inequality of income.
Reduce consumption of demerit Goods.

Taxes can be used as an effective tool to reduce the consumption of demerit goods like alcohol and tobacco. Higher taxes on these goods reduce the consumption. Examples include cigarette tax and excise duty.
Control Inflation.

One of the causes of inflation is ‘too much money chasing too few goods’. Government can take away the extra disposable income of the people through higher taxes and thus reduce the aggregate demand in the economy and resulting in low inflation rate.
Balance of payments.

Tariffs are taxes on imports. Government can correct an unfavourable balance of payment situation by increasing the tariffs. This will result in imports becoming expensive and will cause a fall in demand for the imported goods.
Protecting local industries.

Government uses taxes as a mean to protect local/infant industries. Increasing tariffs on imports and charging lower taxes to local/infant industries may boost the demand for services and goods produced by domestic industry.

Progressive tax system where higher income groups have to pay more tax is an effective way of reducing inequality of income.

Taxes can be used as an effective tool to reduce the consumption of demerit goods like alcohol and tobacco. Higher taxes on these goods reduce the consumption. Examples include cigarette tax and excise duty.
Tariffs are taxes on imports.

Management Accounting

We know that monitoring business performance is crucial to the health of your business, but how do we do it? Reports, reports, reports. Management accounting includes putting together cash flow statements, accounts payable, accounts received, budgets and expense reports. There is no real rule as to what reports you need to create or use to manage your business. It’s all up to you and determined by you, and your business needs.

If you have a considerable amount of customers who owe you money (like a payday loan business) you are obviously going to want to have very well-designed account received reports. Accounts received reports show you who has paid, when they paid, how much more they owe in addition to who hasn’t paid, who’s overdue and what the total amount you are owed is. Knowing this information can help you tremendously as you move forward with business decisions.

Accounting is an information science used to collect, classify, and manipulate financial data for organizations and individuals.

An accountants in springwood is a professional person who performs accounting operations such as audits or financial statement analysis in corporation and business. Accountants in springwood can either be employed with an accounting firm, a large company with an internal accounting department, or can set up an individual practice.

The tax planning advice banks give clients

The tax planning advice banks give clients might revolve around choosing investments that provide the most favorable return for the lowest tax liability, while an insurer’s approach to tax planning might include using cash value life insurance for its tax-deferral features. Estate planning is a form of tax planning, in that its intent is to minimize estate taxes after death. A number of retail income tax software packages provide tax planning tips along with step-by-step guidance on tax preparation, and tax planning advice is also available online from the IRS and other sites.

Why Every Person Needs Tax Planning?

Tax Planning is resorted to maximize the cash inflow and minimize the cash outflow. Since Tax is kind of cast, the reduction of cost shall increase the profitability. Every prudence person, to maximize the Return, shall increase the profits by resorting to a tool known as a Tax Planning

Methods Of Tax Planning.

Various methods of Tax Planning may be classified as follows:

1. Short Term Tax Planning: Short range Tax Planning means the planning thought of and executed at the end of the income year to reduce taxable income in a legal way.
Example: Suppose, at the end of the income year, an assessee finds his taxes have been too high in comparison with last year and he intends to reduce it. Now, he may do that, to a great extent by making proper arrangements to get the maximum tax rebate u/s 88. Such plan does not involve any long term commitment, yet it results in substantial savings in tax.

2. Long Term Tax Planning: Long range tax planning means a plan chaled out at the income or the beginning year to be followed around the year. This type of planning does not help immediately as in the case of short range planning but is likely to help in the long run.

Permissive Tax Planning: Permissive Tax Planning means making plans which are permissible under different provisions of the law, such as planning of earning income covered by Sec.10, specially by Sec. Purposive Tax Planning: It means making plans with specific purpose to ensure the availability of maximum benefits to the assessee through correct selection of investment, making suitable programme for replacement of assets, diversifying and varying the residential status business activities and income etc.

The tax planning advice banks give clients might revolve around choosing investments that provide the most favorable return for the lowest tax liability, while an insurer’s approach to tax planning might include using cash value life insurance for its tax-deferral features. A number of retail income tax software packages provide tax planning tips along with step-by-step guidance on tax preparation, and tax planning advice is also available online from the IRS and other sites.

Long Term Tax Planning: Long range tax planning means a plan chaled out at the beginning or the income year to be followed around the year. Permissive Tax Planning: Permissive Tax Planning means making plans which are permissible under different provisions of the law.