How a CPA firm takes the stress out of Small Business Tax Affairs?

As your business grows, it becomes more and more complex. Taxes are one aspect of your business which will inevitably become more complex, time consuming and expensive. The stress of small business tax affairs plus other business and personal burdens can be a bit overwhelming. Luckily, there are organizations called Certified Public Accounting (CPA) firms which take away this excess stress.

Certified Public Accounting (CPA)

CPA Firms have licensed accountants who are recognized by the Internal Revenue Service (IRS) as enrolled tax preparers. These accountants are familiar with tax laws and possess skills such as audit support, financial analysis and of course, taxes.

Skilled Accountants

Firstly, CPA firms have skilled accountants who will interpret and analyze your business’ financial information and will provide you with professional advice. These accountants are trustworthy and legally bound to keeping your information private. They also have the special training required to give you the best possible service and your money’s worth.

Experience in Tax Preparation & Filing

Secondly, these accountants have the skill and experience required for tax filing which enables them to detect errors you would possibly overlook if you had done your taxes on your own. This results in you receiving the best possible tax savings. Skill and experience ensures productivity and efficiency. This reduces the amount of time you would have to spend filing your own taxes. As a result, you’ll have more time for personal and other business matters.

Follow Rules & Regulations

Thirdly, the rules and regulations of tax affairs change over time. It is time consuming to be constantly on top of these updates, therefore, a CPA firm is recommended to ensure your business is compliant with these new rules and regulations.

Access to Information

Lastly, CPA firms have accountants who can answer any questions you may have at any time about your small business tax affairs. A major key to a successful business is understanding and having access to information. You will never have to research yourself when you have information from a certified professional who is just a phone call or email away.

Tax Filing

Tax filing is not a simple task. CPA firms have certified, trustworthy accountants who are able to advise clients, readily detect and correct errors, save you time and energy, comply to updated rules and regulations, and answer queries. If you are a small business owner, you should consult a CPA firm to see if they are the best option for your business.

Tax Advantages of Being Self-Employed

As a sole proprietor, you can have access to some tax advantages, all you have to do is arm yourself with the necessary information about tax as much as possible.

Self-employment tax deduction

This tax for self-employment is the portion for the employer with respect to social security and medicare to be paid by self-employed people. Every worker must pay taxes, as at 2015 it was 15.30% for self-employed and 7.65% for employees. Self-employment tax is seen as an expense by the IRS and is deducted from the Business income.

Other deductions for the self-employed include

Home office

Workspace cost either rented or owned can be deducted as home office expenses but you have to be prepared to defend this in the case of an audit. A good way of doing this is through the preparation of the workspace map with the right measurement. Which you have to submit for substantiating your deduction.

Phone and the internet

You can deduct your fax, internet, website maintenance and business phone expenses. You may need to deduct all this expense relating to the operation of your business.

Health insurance premium

If you are not eligible for the plan of your spouse’s employer you can deduct your own health insurance premium.

Meals

When you are entertaining a client or travelling for business, the meal taken is tax deductible. Though you are eligible only to 50% of the total cost of the meal. This will be possible if the receipt for the meal is properly kept.

Entertainment

For you to be able to claim entertainment deduction, you must have conducted business with the person or about to for the claim to be approved by IRS. You have to meticulously keep the records to scale through the audit team.

Travel

For your travel to become eligible for this advantage, the trip must be more than 1 work day trip and should be outside of your business location. The details of the business purpose will be filled to show your eligibility for the deduction

Car

Car expenses related to business is tax deductible. You have to keep an accurate record of the business trip as well as the expenses which can be accessed either through standard mileage rate or actual expenses.

Interest

Business loan interest is tax deductible. Although credit card interest is not tax deductible if it is personal: but can benefit when it is related to business.

Always seek help from a professional CPA firm in order to cut down your taxes to the minimum.

Tax Filing Basics: Do You Have to File a Tax Return?

Not all income earners will have to file a tax return. Several factors could determine if you have to file, including the source of the income, how much you earned, your age and your filing status. For some people this is quite straightforward while for others it is not. For example, tax preparation for small business is sometimes easy and sometimes its quite hectic when there are too many entries to handle.

Check Eligibility

If your gross income is higher than your age threshold and filing status, you have to file a tax return. Provided no other claims arise from someone else.

If you are a dependent on the return of another person, differences exist in the rules. Single dependent under 65 and are not blind, are eligible to file a federal tax return was more than $5950. For the single dependents and are blind, you can file a tax return if your income was more than $7,400.

The under 65 who are married and not blind must file a tax return if their earned income was over $5950. 

Criteria for Self-Employed Persons

There are other reasons to file tax returns. The most frequent reason for undertaking this action if you do not meet the criteria above is for self-employed persons. The self-employed can file a tax return if their net earnings are less than $400. Special taxes, including taxes on retirement accounts, alternative minimum tax (AMT), household employment taxes, Medicare tax are other reasons to file a tax return.

Take a Tax Break

If you have made up your mind not to file a tax, you may have to take advantage of a tax break which is available. Excess with-holdings are an example of refund you might be entitled to. 

A lot of taxpayers may have been part of one of these categories. If you consider your situation to be out of the box, you have to file so that the IRS will not write you saying you should have filed.

Federal Rules

It is also crucial to consider that these are the federal rules. Though state rules might be very different and are quite inconsistent. We have no personal exemption and thus, taxpayers are subject to tax on the first dollar. It is possible, then, that you might have to file a state (or local) income tax return even provided you are exempted from federal income tax.

Or just, Ask For Help!!

As always, if you have questions, ask for help. There are so many resources out there. Most software packages have an interview interface that can walk you through your situation – but remembers that those are only as good as your answers. For the best results, consult with a tax professional or call the taxing authorities.

5 Points to Remember while looking for CPA Financial Services

Why hire a CPA firm?

Having a certified public accountant(CPA) or an agency providing such services can be very beneficial when it comes to a business. This is mainly due to CPA financial services being amongst the best and highly dependable, given due their qualification which is sometimes backed by years of experience.

CPA financial services also play a key role when it comes to auditing financial statements. Their expertise in the field is considered to be very essential to organisations ranging from the public to private sector as such qualified personnel are known to be very effective in their field of work. CPA in Gaithersburg is said to have a very well experienced and skilled set of people, who are mainly focused on working in the private and public sector.

Through a CPA who knows what works best, you can even audit financial statements with complete accuracy. The services rendered by such high end qualified personnel can be very crucial in dealing with minor specifications and technical necessities. The CPA financial services are very detailed and informed in nature. The technique and approach used by them make their expertise very essential in today’s business world.

Keep the following points in mind while looking for CPA Financial Services:

• CPAs provides excellent financial services mainly in the form of aiding with tax preparation services and its related segments. These individuals through a blend of experience and skill manage to find what works best and what doesn’t. Their expertise puts them in a position to judge with legitimacy regarding what is best to solve financial, business and investment questions.
• When looking for CPA in Gaithersburg, it is essential to look for personnel who are experienced in work within the state. This will lead to more promising results.
• Do not hire based only on experience, make sure that you keep a good track of all available options so that choosing what works best is the right choice.
• Remember to hire a certified public accountant who knows the subject that is being dealt with inside out. Which means knowing all not just through thorough reading, but as a result of experience too.
• Always hire a CPA who is willing to handle the affairs with complete dedication and skill.

CPA financial services are increasing in demand as days’ pass. The stringent cpa exam that they have to write alongside the depth of knowledge that is possessed, makes them a requirement for fueling financial growth.

Top 7 Tips for Tax Return Preparation

The federal government estimates that 60% of individuals use paid preparers to complete and submit their tax returns. Certified Public Accountants have taken the biggest portion of tax preparers.

CPAs in Gaithersburg take almost all small business tax preparation in the United States. The Accountants lias with the IRS and the client to ensure all taxable areas are covered.

Here is the list of top Tax Return Preparation Tips:

1. Choose a Tax Preparer CPA

The IRS should certify the preparer and should have relevant tax return preparation credentials.

2. Gather your information for Tax Returns

In case you choose CPAs in Gaithersburg, MD, Here are the basic forms they will ask for:

• Form W-2
• Form SSA-1099
• New Form 1095-A
• Various 1098s)
• Form W-2Gs for certain gambling winnings
• Schedule K-1s from entities in which you have an ownership interest

3. Get your receipts together

For small business tax preparation, annual tax receipts for deductible expenses. For business incomes and expenses, books and bank records are mandatory.

4. Gather records for charitable contributions

In case you have engaged in any charity work, ensure you file the records in the tax return preparation drafts, for accountability.

5. Brace yourself for tax law changes

CPAs in Gaithersburg keep changing rules depending on the IRS mandate and target. Read through the annual laws and comply to avoid penalties.

6. Make a list of personal information

Write down current and accurate personal information including addresses of vacation homes and rental property; dates you moved; information about property you bought and sold, including dates, what you originally paid, what you received on the sale and expenses you had) needed to complete your return.

This is especially important for small business tax preparation since their records may have not reached the IRS.

7. Find a copy of last year’s return

Every year that you file tax returns, save a copy for reference purposes. In addition, the copy can be used for comparison purposes as it is an indication of taxable income the business has achieved.

Conclusion

Start early doing prep work for your income tax so you will have a successful tax return experience. Whether you are doing your own return, or having a preparer do it, thorough documentation and organized records will reduce the time

Most of all, these 7 tax preparation steps will ensure that you are not missing out on any tax benefits.

The Process & Benefits of Individual Tax Returns

WHAT ARE THE BENEFITS OF FILING INDIVIDUAL TAX RETURNS? 

The benefits of filing a tax return are the following: 

• The earlier you fill your tax return, the faster you’ll receive tax refunds; 
• You can open bank accounts, get bank credits and make investments if you remain good in the financial institutions;
• If you are planning on getting a visa to visit a foreign country, they will want to know your financial situation, to prove it, income tax returns are the best way; 
• You can get loans quickly and easily.

HOW DOES THE PROCESS OF TAX INCOME WORKS?

The most confusing part of taxation is to understand how the process works and what factors can affect how much you’ll end up paying or receiving back. 

The system used in the U.S is the progressive income tax, which means that the more money you earn, the more taxes you pay. Usually, most part of the employees are subject to having their tax deducted from the paycheck and sent to the IRS, and, if this is your case, at the end of the return, if you paid too much, you’ll receive a tax refund and if the payments were not enough to cover the total income tax due, you’ll have to pay the rest. Always seek help of a professional cpa for individual tax return preparation in order to phase out the mistakes or errors.

When filing the tax return, always remember to indicate all sources of income received during the year, the deductions (home mortgage interest, state and local tax and charitable contributions) and tax credits.

You can also check out tax preparation for small business.