What is the difference between tax planning and tax administration?

While tax planning and tax administration correlates with each other, two aspects of taxes have several differences. The primary difference between tax planning and tax administration is the time frame in which each part is carried out. Tax planning is in advance, while tax administration is an implementation of a plan. While tax planning is not a requirement for an enterprise or individual, tax management is a requirement. Each individual and business in the United States are required for tax administration, which includes the submission of the relevant state and federal tax returns. When an enterprise or individual goes through the tax planning process, it seeks to minimize the tax liability of the entity by planning deducts, purchases and expenditure in advance. Tax Administration, third of the tax planning and tax proceedings concerns the fact that the tax plan is that the tax plan applies to obligations under tax laws and regulations. Tax planning involves taking action necessary to minimize tax liabilitiesku or individuals. Tax administration, on the other hand, is about avoiding interest or fees for non -compliance with tax laws and regulations.

The fourth difference between tax planning and tax administration is a time frame. Tax planning is a measure that is taken at present, but concerns the future. Tax administration, on the other hand, includes the past, present and future. This includes monitoring past sales, deductions, assets and more, making current tax payments and preparing tax documents for any future payments that must be made.

While there are plenty of diffusence between tax planning and tax administration there is also one primary similarity. The main similarity between tax planning and tax administration is that tax planning is a subset or part of tax administration. If an individual or company is in the tax planning process, it also takes into account all aspects of tax management, includingTax deductions, proper audit of accounting files and records, compilation and submitting documents of tax return in time and planning of tax scenarios that may come during this particular tax year.