Tax Preparers- Deductions and Refunds
|Tax Preparers - If you are looking for assistance with tax returns or other financial records and preparations, a professional may be necessary. The best method of research to locate a competent professional is to simply ask for referrals. If people you trust have successfully worked with an individual, you can have much more confidence in your choice than in someone selected from an advertisement or a directory.|
|There are a variety of questions that you should ask before agreeing to work with a particular professional. Request and verify information on education, certification, and work history. Find out exactly who will be handling your work to prevent it from being sourced out to someone other than your initial choice. Learn what work will be performed and what procedures will be in effect if further work, as in the case of an audit, is eventually required. Know exactly how much and when you will be paying for the work that you have requested. You will want to meet with any professional you're considering face-to-face before making your decision. Some even offer a free consultation, which you should take advantage of.|
|Several types of professionals are available to process your tax returns. Tax preparers have the least formal training and usually work for large tax preparation firms. They can handle all the basic types of returns, and anything that isn't terribly unique or complicated. Enrolled agents are licensed and able to represent clients to the IRS. Therefore, they can take your place at an audit.
Certified Public Accountant (CPAs) are highly trained accounting professionals who should be able to handle even the most difficult tax returns. As you might expect, the more highly trained professionals charge more for their services, but they may have a better chance to save you money on your return if you expect your return to be complex. Also, some prefer to handle everything for you, while others are happy doing whatever specific things you want help with; so be sure to find someone interested in providing exactly what you need.
|Helpful questions for learning about a tax preparer include:|
|What is your tax preparation training and experience?|
|Are you an enrolled agent, certified public accountant or lawyer?|
|How do you stay familiar with changes to tax laws?|
|How many tax forms do you prepare each year?|
|How is the accuracy of your work checked? Manually? By computer?|
|When and how can you be reached during the year and during tax season?|
|Are you able to and will you represent me at an audit?|
|How much will you be charging for your services? How does your fee break down?|
|How long will it take you to complete my work? End of the year Many people don't even think about their taxes until March. But there are good reasons not to wait until the deadline looms in the near future. As the end of the year approaches, there might be some things you can do to reduce the burden you will have when you files your taxes. Here are a few ideas:|
|If you have realized a large capital gain, you might consider offsetting that gain by selling an investment that has fallen in value. You can also apply another $3,000 in losses against ordinary income and additional losses can be carried over to subsequent years. (Note that it's dangerous to make investment decisions solely based on tax consequences, but if you're thinking about selling a losing investment, this might be an additional incentive.)|
|Check your mutual fund distribution date. If the mutual fund is down for the year, you can avoid paying taxes on the large dividends and distributions. If you sell the mutual fund before the distribution date, you can avoid paying those taxes.|
|Increase your contributions to retirement accounts such as a 401(k) account ( 401(k)). If you have not contributed the maximum amount, employers will let you make changes on specific dates during the year, and contributions must be made no more than 15 days after the end of the month for a specific contribution.|
|If you have many years ahead of you until you start making withdrawals from your IRA, consider converting it into a Roth IRA, which will enable you to make tax-free withdrawals ( Roth IRAs). However, you must take into account that contributions are not tax-deductible. Conversions also work if you want to pass on money to your heirs, since there are no mandatory withdrawals and your heirs will not have to pay taxes ( IRAs).|
|Take last-minute deductions ( Tax Deductions).|
|If you received a big refund the previous year, you might want to adjust your withholding. While you might like getting a refund, it actually hurts you, because it means that too much tax was withheld throughout the year. If that's the case, you were giving the government an interest-free loan. If you received a large refund, talk to your employer about reducing your withholding amount.|
|If your company provides flexible spending accounts, sign up before the end of the year. The money is deducted from your paycheck on a pre-tax basis to cover expenses such as healthcare not covered by your insurance.|
|If you have control of your salary pay date, you can ask your employer to defer your payment until January, in effect deferring the tax impact for a year. However, this only makes sense if your tax bracket for the following year will be lower or will stay the same.
Estate Planning The level at which estate taxes begin is set to increase over the next several years: $1 million in 2003, $1.5 million in 2004-5, $2 million in 2006-8, $3.5 million in 2009, and a full repeal of the estate tax is currently planned in 2010. (Of course, this is subject to change, as any tax law is.) Estate taxes become very expensive at about $2 million, and can reach as high as 55% for very wealthy individuals. You might be able to reduce the taxes on your estate when you die. There is an unlimited marriage deduction that allows you to leave anything in your will to your spouse without federal estate tax as long as the spouse is a U.S. citizen, which enables you to give tax-free spousal bequea - thments ( Estate Planning).
Money Tax Prepare 2021
Year-end financial planning: How to prepare for Biden's proposed tax changes USA TODAY
Volunteers needed to provide free tax help in 2022 Lincoln Journal Star
Tax Fraud Blotter: Flaws in the system Accounting Today
Volunteers needed to help citizens file income taxes [United Way column] LNP | LancasterOnline