Tax Insurance Defined

Owning a business provides an exciting challenge for many individuals, but it also can cause financial uncertainty. The thriving Fords, NJ area offers many opportunities for commercial ventures and Five Star Insurance Agency wants to help you get started. We address many methods and strategies of financial planning, including the vital product, tax insurance.

Tax insurance can help you alleviate financial uncertainty by providing a risk management tool that helps businesses and corporations protect themselves from an investment or property purchase that does not qualify for the tax break for which it was intended.

Think of it as tax credit insurance, but it covers much more. It really covers you for any potential shortfall in tax liability. You may have planned for a specific tax bill based upon historical data figures or used fiscal projections based upon projected sales. These may turn out completely inaccurate if you had great sales or poor sales. A business deal’s value may change, the internal restructuring may not work out as planned, you may not qualify for an investment tax credit, or you may end up the victim of poor tax planning.

A tax insurance policy provides your business the coverage to pay the actual tax including any interest, penalties, taxes payable, the gross-up amounts on insurance proceeds, and your attorney fees and court costs if you need to defend yourself in a tax-related court case such a tax evasion case.

Policies cost relatively little in premiums, so they provide an effective and affordable means of fiscal protection. The policy applies to tax at every government level including local, state, federal plus foreign taxes.

Tax insurance falls within the realm of commercial policies of which there exist more than 40. Many of these you probably have not heard of and tax insurance might be a new term to you. The policy type has existed for many years and many Fortune 500 countries use it as a means of corporate protection of fiscal risk.

While this product traditionally has been used by large corporations, your business can use it regardless of the operation’s size. A solopreneur can use this type of policy as a risk mitigation tool just as effectively as a Fortune 500 company can.

Contact Five Star Insurance Agency serving Fords, NJ to learn more about tax insurance. You can protect your business from unexpected tax liability with this business policy.