When it comes to preparing your taxes, you should have a balance sheet and an income statement. A balance sheet should list your assets, such as cash, accounts receivable, inventory, equipment, etc. It should also list your liabilities and equity.
Having a personal accountant that you can call when you have a question is worth the small cost. The peace of mind of being able to have your questions answered is worth its weight in gold!
What’s the difference between tax credits and tax deductions? An accountant experienced in tax returns can explain that deductions lower your taxable income. The lower your income, the less you pay in federal taxes. Tax credits are even more valuable. They directly reduce the amount of taxes you owe to the government.
Wouldn’t I be better off having a CPA, rather than an EA, handle my company’s tax return? Not according to many experts, who point out that while CPA’s must pass a difficult exam covering accounting and auditing procedures, an enrolled agent has to pass a two-day exam that focuses only on tax issues.
Whether you are going to want to accelerate or defer expenses in a given year is going to depend primarily on your business outlook. For instance, if you had a bad year but expect your profit to pick back up, then you’ll want to defer expenses so that you can take the deduction at that time.
If you are an accountant who yearns to solve crimes, consider a career at the FBI! They employ more than 2,000 accounting special agents and in the current political climate, they may need many more!
It’s important to remember that a CPA can only perform work for individuals and businesses in specific states. If you need a tax preparer that can handle work in any state, working with an enrolled agent may be a good choice.
Not only is making a charitable contribution in December a great thing to do for both individuals and small businesses, it’s also a smart move when it comes to tax planning. This way you are able to claim a deduction on that year’s taxes.
While it’s everyone’s duty to pay their taxes each year, we understand how easy it can be for individuals and businesses to fall behind. We’re here for you when you’re ready to take control of your IRS debts.
Pop Quiz: Q. If a chef wants to inflate the books, how does he "cook the books" instead of another meal? A. Classify normal operating expenses as assets on the balance sheet. This is a common way to artificially reduce reported expenses.