Having a good tax professional can save you a lot of money. They can help you find efficient ways to legally lower your tax liability, calculate taxes on diverse investment portfolios, and get insight into the latest tax laws.
They can also handle infrequent life events that trigger one-time tax changes. These include getting married, buying a home, or receiving financial windfalls.
Tax Planning
Most people despise tax season, and a good reason is that it’s often overwhelming, stressful, and downright confusing. Hiring a professional to help navigate the tax code and file taxes can save you time, money, and stress.
In addition to filing your tax returns, a tax advisor can assist with strategic planning to reduce your taxable income and maximize deductions and credits. This year-round process considers the client’s past filings, current financial situation and regulations, and future goals. When choosing a tax advisor, choosing one with the right experience level for your business is essential. Consider getting recommendations from other small businesses and checking their credentials. Then, interview several professionals to ensure they are a good fit and their fees are within your budget. Don’t hire them if they don’t break down their fee structure. Also, look for a firm that provides tools and resources like webinars, videos, IRS guides, a client portal, and other resources for you and your accountant.
Tax Deductions
Using tax deductions can dramatically reduce a business’s tax liability. A tax advisor like those at Wichita Tax Advisors can help clients take advantage of the available write-offs by setting up processes for tracking deductible expenses throughout the year and preparing their tax returns. The value of deductions depends on the taxpayer’s marginal tax rate, which rises with income. Higher-income households tend to itemize, and the value of their deductions is greater than that of lower-income households because they incur more expenses that can be deducted. Regulation of tax advisors should balance the state’s interest in raising revenue with the public’s interest in having access to competent professionals. For example, it is reasonable to restrict representation before the courts (or before administrative tribunals with procedural rules similar to those of courts) to lawyers rather than professional tax advisors who lack sufficient competence in legal or tax litigation. In addition, the regulation should include rules relating to ethical standards, conflicts of interest, and restrictions on the financial interests of potential customers.
Tax Compliance
Keeping up with the tax code is difficult for individuals and businesses. One of the primary causes is a need for more clarity and consistency in the law. Another is the number of provisions with their own rules, such as tax deductions, credits, and saving incentives. Many of these provisions may be legitimate, but their sheer quantity increases complexity. Furthermore, the IRS devotes significant resources to investigating and resolving tax evasion cases. To address these problems, the tax code needs simplification. Creating a more transparent process and incorporating safety checks into these processes will reduce the time spent on compliance and allow firms to focus on client issues that require their attention. Individual or business time valuation is essential to any compliance cost estimate. Analysts use different methodologies to value time, and the results vary significantly. Using methods that incorporate opportunity costs, such as Vaillancourt and Slemrod, would help reduce differences in compliance cost estimates.
Tax Return Preparation
Filing taxes requires gathering financial records, filling out forms, and paying any tax due. While it is possible to complete these tasks by hand, it can be time-consuming and error-prone. Many consumers find using a tax software program or working with a professional tax preparer easier. Reputable tax professionals have a PTIN and EFIN (electronic filing identification number). They also have to meet continuing education and character requirements. Generally, there are four types of professional tax return preparers: Enrolled Agents, Electronic Return Originators, Annual Filing Season Program participants, and Certified Public Accountants. Getting the right tax advice can save you work hours and give you peace of mind. A professional can help you find deductions and credits that you may have yet to learn about or had trouble finding online and assist in the event of an IRS audit.
