Tax shields reduce the amount of taxable income through tax deductible expenses such as depreciation, interest expenses, medical expenses and donations for certain investments and expenditures. These tax deductions reduce tax liability by directly reducing the amount of taxable income in the year of the tax return or by deferring taxes payable to subsequent years. Tax shields increase the value of a business by reducing its tax liability and tax payments.
Since tax shields only apply to certain activities and expenses, the tax shield dimension should be taken into account in each financial operating decision in order to maximize tax savings.
Our firm helps our clients proactively identify, evaluate and utilize tax shield opportunities in their business decisions, maximizing tax shields and minimizing taxes payable.