Hire an Accountant to save your Tax

Choosing an accountant is part of building your team. But it is not always easy to find an accountant who understands your business needs. An accountant who is sensitive to your needs and understands you are not the expert will help you understand the difference between bookkeeper, accountant and CPA. Even owners with accounting backgrounds need help of tax accountant from time to time.

It is always a good option to hire a tax accountant to determine your tax liability. If you have an income from interest, capital gains or losses or small business, tax accountant can save you money by suggesting some valuable tips.

Taxation in the United States is very complex which may involve payment to at least four different levels of government and many methods of taxation. The tax planning strategy should have an emphasis on how to reduce your taxable income, shift taxable income into nontaxable income, take advantage of tax credits, and pay the right amount of estimated taxes.

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Income tax act and how it affects you

Income tax forms the bulk of taxes collected by the U.S. government. Depending on individual income, the tax ranges from zero to 35% of one’s taxable income. The income tax is considered a progressive tax because the tax rate is higher as a percentage of the income for higher-income individuals.

Some state and municipal governments also impose income taxes. In addition, some states allow individual cities to impose an additional income tax.

CPA Hiring Tips

A CPA is a professional accountant licensed by the state. CPAs are best for corporate accounting, tax audits, and business consulting.

An Enrolled Agent is a tax professional licensed by the IRS. They are best for complex tax issues, tax audits, and responding to tax collectors.

A Tax Preparer may be registered by the state and are suitable for straightforward tax returns.

Retail tax franchises such as H&R Block, Jackson Hewitt, and Liberty Tax Service offer competent tax service for individuals who need to file relatively straight-forward tax returns.

After your interview, check the background of your tax accountant. Contact your state’s board of accountancy to check the status of a CPA’s license, for enrolled agents you can ask the IRS Office of Professional Responsibility.

Cost Cutting and Optimizing Profits

A tax accountant can help you in identifying ways that can minimize your tax liabilities. Considering the after retirement needs, an accountant can structure your retirement plans to minimize not only your current but also the future taxes. With their extensive tax knowledge, accountants can suggest various ways that can add your savings.

Financial accountants assist not only the business organizations but also at individuals’ level, they develop strategic plans to achieve financial growth.

Tax Preparation:

Tax laws are complicated and it is always a better option to hire a professional tax accountant to work out the tax laws established by local, state and federal government. Having a professional tax accountant to prepare your income tax returns can make a significant reduce the tax time anxiety.

Tax accountants can effectively evaluate your current operations and finances to frame a tax minimization plan. He can also help in evaluating transactions and in providing tax efficient alternatives.

To make an effective tax plan, you should have right tax records at hand. Tax accountants get paid by the hour, so organize your documents to reduce tax accountant’s work.

How to select a public accountant?

There is an examination for all Accountants in US. After passing this exam they are known as Certified Public Accountants. After Acquiring this CPA license an Accountant can start practicing.
An accountant should meet all the legal requirements of your state. Currently, each state has its own rules, regulations and requirements to allow out-of-state CPAs to provide services in that state.

Before selecting a certified public accountant always make a list for the desired services that may include tax preparation, financial reports, balance sheets, invoicing, payroll services etc.

Most of the accounting firms are capable to handle all the accounting services, but you can take services from different accountants for different tasks as per your demand.
An expert accountant can help you to save money through careful tax planning and tax-saving strategies.