Top Ten Reasons to Hire a Professional Tax Preparer
Hiring a Professional Tax Preparer
When your business is growing, hiring a professional tax preparer may seem like a no brainer; however, some business owners choose to be cynical and refuse to hire a professional tax preparer, regardless of how beneficial hiring such a tax preparer may be. Even though hiring a professional may seem like an easy decision, perhaps you haven’t hired a tax preparer because you can’t really pin down the precise benefits a preparer can offer.
Here are the top ten reasons why you need to hire a professional tax preparer:
- Tax preparer’s eliminate the hassle of doing taxes yourself.
- You don’t have to keep up with changes in tax law
- Making mistakes can cost you a lot of money.
- Your time is valuable and the hours you spend preparing taxes yourself could be spent elsewhere
- If you do your own taxes and do it wrong you’ll have to represent yourself in an audit
- A tax professional can help you answer your tax saving questions
- A tax professional can help you plan all year
- A tax professional can offer solutions on how to save money on taxes
- Tax professionals give you peace of mind that your tax needs are met
- Hiring a tax professional can save you money.
While there are a host of other reasons why you should hire a professional tax preparer, the above are the most important and most obvious reasons why you need to do so in order to plan for the sound financial future you so eagerly want to achieve.
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How Much Should You Pay Your CPA
Paying Your CPA
When hiring any new person on your team, one of the first things you’re likely to think about is whether you will be able to afford the person you are attempting to hire. While there is no perfect way to determine how much you should pay your CPA, here is a list of criteria which should help you through the decision-making process.
Hourly
Hourly rates can vary dramatically based on your location, the services you can provide and your experience. While lower hourly rates are great, they don’t necessarily indicate better value. A more experienced accountant may charge more money, but then complete the task in half the time. Remember, you will always get what you pay for.
Proposal Basis
Before beginning work, most CPAs offer their clients an estimate of what their total cost will be for the entire project. Once an estimate has been given, the accountant will prepare a proposal that will estimate how long the tasks will take and then multiply the number of hours required by the hourly rate so that the client will know exactly how much money they will be paying up front. Instead of waiting to see what the invoice says, you’ll know what to expect right away.
Fixed Fee Structure
There will be several tasks which will require ongoing assistance from your CPA, such as: balancing books, payroll and posting transactions. Most of these tasks have a structured fee, meaning there’s one set cost each time these tasks are completed.
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Pay Now or Pay Later: Five Tax Questions You Should Ask Yourself When Starting A New Job
New Job
Starting a new job can be just as exciting to adults as the first day of school is to children. It is an opportunity to begin something new and it is also the opportunity to start fresh in your career. But while starting a new job can be super exciting, it can also be super overwhelming, especially when it comes to filing out tax forms.
Most employers require that their employees fill out tax forms prior to starting a job. Doing so not only verifies your identity but also ensures you are legally allowed to work in the country. After completing these forms, your wages will be taxed by your employer in the manner which is proper according to your marital status, earnings and so forth.
As you mull over the complexities of your new job, it is important to remember that obtaining new employment can oftentimes give rise to all sorts of new tax issues. Here are five tax-related questions you should be sure to ask yourself when you begin a new job.
How do allowances affect my paycheck?
If you claim more allowances, you will have less income tax withheld from your pay. Fewer allowances also mean more income tax is withheld from your pay.
How much will one additional allowance change my take-home pay?
One of the most efficient ways to display how an additional allowance will impact your take home pay is by using the form W-4 Withholding
Should I file married but withhold as single?
When you select the “married” box you generally will have less tax withheld. The primary reason for this is because the withholding formula assumes that during tax season you will file jointly with a spouse who doesn’t work.
If your spouse has a high income, you may want to consider checking “married but withhold as single” to ensure a significant amount of taxes is being withheld.
Is it better to have more withheld just to play it safe?
While choosing to have too much tax withheld may feel safe there is nothing safe about allowing the IRS to hold an unnecessary amount of money. If you really want to play it safe simply do your tax form the right way.
Is a withholding allowance the same as a dependency exemption?
Not quite. A withholding allowance is not the exact same thing as a dependency exemption. The size of your withholding allowance is in part based on your dependency exemption.
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How are Bitcoins Taxed?
Bitcoins are a popular form of digital currency which have been around for around a decade now. This form of currency is not operated or regulated by a central bank, but uses encryption techniques to help with regulating each of the currency units and verifying all the transfer of funds to and from accounts.
Bitcoins became extremely popular as the release of PayPal and similar companies offer a worldwide bitcoin to help with purchasing and selling goods across the globe without currency restrictions. What made it even better was the fact that Bitcoins couldn’t be controlled by current currency rules, making them tax-free. This led to the value of a single bitcoin to rise to $1,194 in late 2013.
The Internal Revenue Services (IRS) and other national revenue services sought to close this tax-loop, forcing new laws into effect that made bitcoins an asset rather than a currency. Therefore, anyone who purchases bitcoins needs to claim these on their taxes, after excluding fees associated with getting the assets. This includes electricity and internet usage during the time the bitcoin was acquired.
The IRS now finds it mandatory that all people file taxes on their bitcoins in either of these cases:
- Using bitcoins that are purchased from someone else to buy goods or services;
- Using any mined bitcoins to buy their services or goods;
- Selling personally-mined bitcoins to a third party service; or
- Selling bitcoins to a third party which were originally purchased from someone else.
Each of these will be subject to their own mandatory taxes. Hiring a company to help you with your bitcoin taxes is advised to avoid any errors with filing.
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Three Tax Tips for Married Same-Sex Couples
Since 2013 the Internal Revenue Service (IRS) has finally started to recognize marriage between same-sex marriages under certain legal conditions. The marriage had to be valid legally and after 2015 it was legalized in all states. Same-sex marriages are now held to the same tax standard as any other couple.
Understand the Rules of Your State
Even though federal law has allowed for same-sex marriage, many individual states still deny statutory benefits of legal marriage to same-sex couples. It’s important to determine what additional rules there might be for your state from your tax department.
Determine Your Filing Status
Married couples have the ability to file either jointly or separately depending on their financial circumstances. Which one they file for is up to the couple, but they may reap the same tax benefits as any other married relationship. The status of married filing jointly often allows for a lower rate of taxes. Married filing separately can sometime have drawbacks, and if there are any children involved in the relationship they may only be financially claimed by one parent.
Calculating Results
In some cases, it may be worth filing separately instead of filing together. This all depends on the financial situation of the couple. It’s worth the effort to calculate the tax return under both conditions.
Conclusion
Same-sex couples have achieved a significant step forward in the last few years. With the ability to file separately or together, the same-sex newlyweds are now in further control of their finances. Use your newly accessible filing status to the advantage of your family.
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How to Avoid Capital Gains Taxes
Incurring taxes on your capital gains can seem pointless and infuriating to those that put time toward their investments. There are many ways to avoid the tax when investing, but none are necessarily beneficial to society or the economy.
Excluding Your Residence
Individual investors can exclude up to $250,000 in capital gains from the sale of their home. This location has to be the investor’s primary residence. Investors who stay in the same area for long periods of time suffer a tax that is best avoid. Moving frequently can help you to avoid the capital gains tax.
Home Renovations
Investors involved in flipping houses make their purchases their primary residences while they work on flipping the house. After renovations have been completed, the individual will sell their house for a higher price, avoiding any capital gains. Selling your primary home can be done if the housekeeper has lived there during two of the last five years.
Stock Exchange
Investors with an appreciation for risk and reward may prefer to invest within the stock exchange. Trading stocks in the daily market or over long periods of time can acquire serious value. Services can offer investors with a diversified portfolio which can help investors avoid the larger capital gains taxes which stock investments usually bring.
Conclusion
Avoiding capital gains when investing can be a tricky and complicated experience. Make sure to research all the different possible ways that you can avoid losing a majority of your investments to the capital gains taxes.
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How does the Cash Payment Option for Taxes Work?
If you are unable to pay your taxes through any other form of currency other than cash, it is important for you to know that the Internal Revenue Service is now providing services for cash-only taxpayers. The IRS is working in coordination with companies, such as ACI Worldwide, the PayNearMe Company, and 7-Eleven in order to provide this option.
How It Works
Taxpayers interested in paying their taxes with cash, need to visit the IRS’s official website and select the cash option button in the “other ways” section of website’s payments page. From there, they will receive an official email from OfficialPayments.com to confirm their information.
Once the taxpayer responds and all information is verified, PayNearMe sends an email link with a payment code and instructions on how to use that code to pay for taxes. This code can be printed or sent to a taxpayer’s smartphone along with a list of 7-Eleven stores which participate in the Cash Payment Option program. All taxpayers are provided with a receipt once the transaction is completed. Payment is usually processed by the IRS within two business days.
In addition, taxpayers participating in this program can only pay up to $1,000 per day, and are subject to $3.99 service charge for each transaction that they make.
Using the Option
If you are considering using this option to pay your taxes, start the process well in advance of your tax payment deadline. The option is a three-step process and the IRS encourages early enrollment.
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