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You should seriously consider tax planning services if you own and operate a marketing agency. In an industry of over 85,000 agencies, finding ways to streamline your business, lower tax liabilities, and increase profitability will give your business a competitive edge.

Tax planning can ensure your business complies with tax laws while maximizing every qualifying deduction and credit available—saving you significant money when you file your return. We’ll explain how tax planning works, why it will benefit your marketing agency, and ways it can increase your productivity.

What is Tax Planning?

A tax-efficient marketing agency pays the lowest taxes required by law. You can use numerous strategies to improve your agency’s tax-efficiency at both the state and federal level. These tax strategies can differ depending on their short or long-term objectives.

A proactive plan requires year-round attention. You should always look for ways to reduce your tax liability. Marketing agencies should work with an accounting expert that can assess your previous returns and find opportunities to lower your taxes in the future.

Related Link: eCommerce Tax Planning: 5 Surprising Ways Your Online Store Could Affect Your Taxes

Tax Planning Benefits Any Marketing Agency Regardless of Size

By working with an accounting firm, you’ll realize that planning long-term can save considerable money when it comes to filing your returns, regardless of your agency’s size.

Small marketing agencies often overlook valuable deductions and credits they didn’t know they qualified to claim. And large agencies can benefit from every opportunity where tax planning will make them more efficient.

Benefits of Strategic Planning for Marketing Agencies

The following benefits apply to all marketing agencies:

Minimize Corporate Tax Liabilities

Your tax planning specialist will be able to identify all the deductions and credits your agency can claim. They will then recommend quarterly actions and improvements you can take throughout the year to get the full benefit.

Improve Operational Efficiencies

By analyzing your agency’s expenses every quarter or month, the tax planning specialist will be able to identify redundancies and inefficiencies so that the agency can make smarter, real-time decisions to improve performance. They can also identify opportunities for tax breaks by adjusting operations or expenses.

Increase Corporate Profitability

This really is a product of lowering tax liabilities and improving operational efficiencies. Your agency will be operating more profitably, which will allow you to grow your agency and your wealth.

Aren’t sure what tax credits your business is eligible to claim? Contact us for tax planning advice.

Related Link: Tax Planning Tips for E-Commerce And Digital Marketing Firms

Tax expert helping marketing team

What Goes into the Tax Planning Process?

To ensure your marketing agency is the most tax-efficient, your tax planning specialist will:

  • Analyze and Assess: Your accountant will analyze your prior returns to find any additional deductions or credit opportunities, as well as scour the current tax code for any missed opportunities for your tax bracket. Your accountant will also track federal tax legislative proposals to plan for future tax liabilities.
  • Recommend Actions to Improve Deductions and Credits: The federal and state tax codes allow for a wide variety of deductions and credits that have requirements in order to be claimed. Your accountant will recommend how to move forward and what your business needs to do to claim all possible deductions and credits.
  • Track and Gather Necessary Documentation: When done throughout the year, this streamlines your tax return filing because most of the dirty work is done. Your accountant can also analyze all your sources of income and collect documentation on:
    • Commissions
    • Freelance work
    • Investments
    • Property sales
    • Sponsorships
  • File Your Return: This comes after quarterly assessments, recommendations, and tracking. But you should have a clear idea of your tax savings, and then the whole process is worth it. Your accountant can also file for extensions or calculate tax payments depending on your situation.

 

Taxes Most Marketing Agencies Need to Pay

Regardless of the size of your marketing agency, your business will need to have a tax plan for:

  • Income Tax: This can be tricky for many marketing agencies because many marketing agencies are S Corps. S Corps have specific requirements and income tax laws that would benefit from a tax planning strategy.
  • Sales Tax: Marketing agencies can incur sales tax from print materials, finished artwork, and advertising services. And some states require an additional client sales tax for advertising services like Adwords that doesn’t charge a sales tax initially. A tax plan can help offset these sales tax requirements, depending on where you do business.
  • Property Tax: Some marketing agencies may own real estate where they must pay property tax for their office space. A tax plan would help leverage these property taxes as a deduction for their business.

 

Related Link: 7 Must Know Tax Planning Tips for Digital Marketers

Tax expert creating tax planning with marketing agency

Tax Strategy is Critical for Lowering Your Tax Liabilities

Marketing agencies should incorporate a tax planning strategy where they meet with their accounting expert on a quarterly or monthly basis to ensure they are tax-efficient when it comes time to file their tax returns.

While tax planning services can cost more than tax preparation services, tax planning creates more opportunities for your business to reduce tax liabilities significantly. And your accountant will recommend the best actions to receive the best deductions and take advantage of all the qualifying credits.

Tax Hack is a tax advisory firm with in-depth expertise in the marketing agency industry, helping small to large businesses find the most tax savings through strategic tax planning. We understand the intricacies of marketing agency start-ups and can ensure your business is tax efficient.

Need accounting advice on how to plan for the next tax year? Talk to one of our tax planning experts.

Related Link: Tax Planning: Why Its Important to Forecast Your Tax Liability Today

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