Hire a Lawyer, not an Accountant, to file Income Tax Returns

Hire a Lawyer, not an Accountant, to file Income Tax Returns

Failing to report under the table business income is likely to make one feel uneasy, or even guilty. It is also possible that you skipped filling your income tax returns even though you are aware of the legal responsibilities in respect to this. To rectify the situation, you might be considering hiring an accountant.

While it is appreciable that you are on your way to set things straight, stop and think whether or not you are making a big error by getting an accountant to help you deal with … Read more at 2009 Tax.

Hire a Lawyer, not an Accountant, to file Income Tax Returns

Failing to report under the table business income is likely to make one feel uneasy, or even guilty. It is also possible that you skipped filling your income tax returns even though you are aware of the legal responsibilities in respect to this. To rectify the situation, you might be considering hiring an accountant.

While it is appreciable that you are on your way to set things straight, stop and think whether or not you are making a big error by getting an accountant to help you deal with the issues of delinquent taxes. The reason for this is that tax evasion is considered a criminal offence or felony. Defaulters might find themselves faced with civil action as well.

Would you consider getting an accountant to defend you if you got caught robbing a bank? I’d venture to say you most definitely would not. A much wiser decision would be to invest in the services of a capable attorney.

One advantage of hiring an attorney in this context is that they have solicitor-client privilege (alternatively referred to as attorney-client privilege or legal advice privilege). This implies that the information with regards to income tax returns or delinquent taxes that the client divulges to his lawyer remains strictly between the lawyer and the client and cannot be used against the client. Written records are also included in the gamut of solicitor-client privilege.

Comparatively, if you hire an accountant to help you deal with matters of delinquent taxes, he might, at some stage, be compelled to testify against you and is obliged to hand over a complete of the records he possesses pertaining to the case upon request.

Your lawyer also has the ability to create a legal document that would protect you. Since you are coming clean, the tax authorities may refrain from slapping criminal charges on you and might even waive or decrease penalties or tax liability.

If your accountant, on the other hand, attempted to achieve the same end, every bit of information about you might need to be divulged. Your accountant would not come under the protection of the solicitor-client privilege.

If you hire the help of an accountant, the tax authorities might charge you with tax evasion even if you are trying to set things straight by filing your tax returns from, say, ten years back.

In fact, concealing your delinquent taxes might place the accountant in a precarious situation. The reverse is true when you choose to let an attorney handle this for you. Your lawyer cannot be legally forced to give testimony against you, thanks to the solicitor-client privilege protection. It is highly possible that your lawyer would have his personal accountant to help deal with the concerned issues.

Since you would hire a lawyer specializing in criminal and tax law, he would be cognizant with the process of negotiations with the tax authorities before filing your tax returns.

If you feel that there is a good chance of you being charged for a criminal offence owing to delinquent taxes, it is better to steer clear of accountants. Alternatively, hire a lawyer who is highly knowledgeable in these matters when you set out to file or amend tax returns.

How To Maximize After-tax Returns

How To Maximize After-tax Returns

In order to keep taxable distributions from mutual fund distributions to a minimum, you must take into consideration tax-efficient funds for your investment portfolio.

In the context of tax-efficient investment, what is more significant than what you earn is what you can keep. The goal is to maximize your after-tax returns. The tax efficient mutual funds make applications to investments outside of IRAs, 401(k)s and other tax-deferred accounts.

T. Rowe Price, a renowned global investment management firm, opines that tax-efficient mutual funds are gaining fast popularity even in the face of deductions in tax Read more at 2009 Tax.

How To Maximize After-tax Returns

In order to keep taxable distributions from mutual fund distributions to a minimum, you must take into consideration tax-efficient funds for your investment portfolio.

In the context of tax-efficient investment, what is more significant than what you earn is what you can keep. The goal is to maximize your after-tax returns. The tax efficient mutual funds make applications to investments outside of IRAs, 401(k)s and other tax-deferred accounts.

T. Rowe Price, a renowned global investment management firm, opines that tax-efficient mutual funds are gaining fast popularity even in the face of deductions in tax rates.

Taxes do not feature among pleasant thoughts. However, investors aiming at reducing taxes and maximizing after-tax returns don’t really have a choice but to think about taxes. It is their job to keep track of their portfolio holdings, distributions and their huge volume of transaction data.

However, tax-efficient investment is not just about avoiding taxes, it is much more than that, as explained by Don Peters, who is in charge of a number of tax-efficient portfolios at the global investment management firm, T. Rowe Price.

He adds that correct tax-efficient investing means the ability to build and manage a portfolio of securities so as to enable you to hold on to it for a long period and ensure that you maximize your after-tax returns.

However, tax-efficient investments are not free from some misconceptions. A very common misconception is that it is not wise to buy stocks of companies that pay dividends, as the latter is believed to be taxable. Don Peters clarifies that the system is far from being so simple.

The second misconception in the context of tax-efficient investing is that investors can end up coughing up a considerable capital gains tax if they sell off their holdings. Peters warns investors against allowing tax phobia to stand in the way of smart and wise investment decisions.

He explains that investors might find it very difficult to arrive at a decision to sell, especially where a considerable unrealized capital gain is involved. Don Peters also mentions that to have a tax-efficient investment strategy to be successful and give good returns, profit should be maintained at a minimum but greater than zero.

7 Steps To Reduce Your Tax Related Stress

7 Steps To Reduce Your Tax Related Stress

If you have your own business what may haunt you most is the stressful task of filing your tax returns at the end of the year. Every year brings you the harrowing experience of piling up your financial documents and preparing your tax return. It adds to your worries if you have earnings in other countries as well, as you need to file your tax return from those countries as well.

Here are seven gradual steps that will certainly minimize your tax returns related hassles.

1. Maintain your accounts accurately. Buy a … Read more at 2009 Tax.

7 Steps To Reduce Your Tax Related Stress

If you have your own business what may haunt you most is the stressful task of filing your tax returns at the end of the year. Every year brings you the harrowing experience of piling up your financial documents and preparing your tax return. It adds to your worries if you have earnings in other countries as well, as you need to file your tax return from those countries as well.

Here are seven gradual steps that will certainly minimize your tax returns related hassles.

1. Maintain your accounts accurately. Buy a ruled ledger from the nearby stationery store and keep a record of your accounts.

2. Keep your receipts/bills in a safe place. Enter the finer details of the receipts into your accounts book once a week.

3. When you receive a payment, don’t forget to record that payment in your accounts system.

4. Browse through various accounting software packages available with your software retailer. Don’t go for a complex accounting software that may make your accounting more complicated instead of simplifying it. Choose a simple application. If spreadsheets and cell formula work better for you, keep your accounts in a spreadsheet program.

5. Now, open your tax return envelope without any delay. Check if all the sheets are there that you may need. If you find that any sheet is missing, you can download it.

6. Don’t leave your tax return job for the eleventh hour. Try to file your tax return well ahead of time. This will give IRS or the revenue department time to check your forms to ascertain how much you owe them. This is rather less stressful than calculating it yourself and continuing to doubt your calculations skills.

7. Analyze steps 3-6 again. If you feel they are not your cup of tea, you can hire an accountant. Of course, you will have to pay the accountant for keeping your accounts and for preparing your tax return. How much you will pay will depend on the complexity of the work the accountant will have to complete. If you have a habit of keeping a neat and clean accounts book and keeping a safe copy of each of your receipts, you may not have to pay a higher fee to your accountant.

How to Get Tax Help?

How to Get Tax Help?

It’s a highly stressful activity to prepare your taxes. In many occasions, it’s found to be beneficial to look for some tax help. O’ My God, Save My Soul!

At the time you file your taxes; you might look into finding someone or possibly find a computer -software. Here, let’s focus on a living person and try to understand a tax professional. In fact, you will find many people who will be able to help you with different levels of expertise.

Tax Preparer

A tax preparer normally has the least expertise for filing taxesRead more at 2009 Tax.

How to Get Tax Help?

It’s a highly stressful activity to prepare your taxes. In many occasions, it’s found to be beneficial to look for some tax help. O’ My God, Save My Soul!

At the time you file your taxes; you might look into finding someone or possibly find a computer -software. Here, let’s focus on a living person and try to understand a tax professional. In fact, you will find many people who will be able to help you with different levels of expertise.

Tax Preparer

A tax preparer normally has the least expertise for filing taxes. These are trained professionals who can conveniently do a return filing. For example, the people who work at H&R Block represent a big collection of preparers. One main advantage to them is that tax preparers charge a cheaper rate. Remember that most of the time the service will match the payment.

Enrolled Agents

Enrolled agents are the individuals who undergo licensing through the IRS. Compared to a tax preparer, the enrolled agent can also assist you with your auditing. They are an advanced type of tax preparers; however, knowledge and quality of work will vary from one agent to the next. Because of their own interests, some agents excel and remain on top. Others may not be as impressive with their performance.

Certified Public Accountant (CPA)

The CPAs obtain their licenses through lot of toil. It requires tremendous study to get a CPA license and moreover passing the licensing test is not easy. In cases where your financial situation is really complicated or unique, you should approach a CPA for your taxes. As a matter of fact, you should use a CPA all year round to help you plan your finances so that you can save money on tax payments.

CPAs are very costly as they normally charge around USD 200 to USD 300 per hour of service. In fact, most of them are worth paying the money for their services. If you need a CPA, then go for one who is proactive. The proactive CPA will tell you all about your finances and life planning. They will come up with suggestions for significantly lowering your tax payments. Normally, the savings are going to “more than justify” their high fees, and in the long run you will be happy.

So, out of the three, which one will you pick? It completely depends upon the complicacies of your finance. Suppose you are a salaried person with a gross annual income of USD 50,000; then a simple tax preparer can do the job for you. In case you have a small business, then finding an efficient CPA is advisable for you.

Tax Changes you Need to Know About

Tax Changes you Need to Know About

The American Recovery and Reinvestment Act (ARRA) has many different tax provisions to spur economic growth. The First Time Home Buyer’s credit and the new expanded Long Time Home Buyers credit are things you can take advantage of if you purchase a home. Tuition changes make school more affordable. And making your home more energy efficient can earn you tax credit.

The IRA limits have been increased to provide additional saving opportunities. Now singles with income up to $65,000 and couples with income up to $109,000 can put money into IRAs with … Read more at 2009 Tax.

Tax Changes you Need to Know About

The American Recovery and Reinvestment Act (ARRA) has many different tax provisions to spur economic growth. The First Time Home Buyer’s credit and the new expanded Long Time Home Buyers credit are things you can take advantage of if you purchase a home. Tuition changes make school more affordable. And making your home more energy efficient can earn you tax credit.

The IRA limits have been increased to provide additional saving opportunities. Now singles with income up to $65,000 and couples with income up to $109,000 can put money into IRAs with a deduction.

Standard deductions have been increased for almost everyone which reduces your tax burden. And the standard mileage rates have been improved to make driving for work affordable. A 55 cent deduction is available for business travel while 24 cents per mile is available for medical travel.

Finally the ceiling for child interest income taxed at a child’s tax rate (Kiddie tax) has been raised to $1,900. Gifting more to children is now beneficial for the whole family.

When Should You File Your Tax Return?

When Should You File Your Tax Return?

It’s a routine affair for millions of US citizens to get ready every year by collecting their records and receipts for filing their federal income tax returns. Do you know when the first tax season got started? Let us have a look at this peculiar day of “April 15th” and see the reason behind it being selected as the tax day.

In the 1860s, under the presidency of Abraham Lincoln, income tax payments became mandatory. The Congress and the President jointly selected the Commissioner of the Revenue and formulated the federal income … Read more at 2009 Tax.

When Should You File Your Tax Return?

It’s a routine affair for millions of US citizens to get ready every year by collecting their records and receipts for filing their federal income tax returns. Do you know when the first tax season got started? Let us have a look at this peculiar day of “April 15th” and see the reason behind it being selected as the tax day.

In the 1860s, under the presidency of Abraham Lincoln, income tax payments became mandatory. The Congress and the President jointly selected the Commissioner of the Revenue and formulated the federal income tax law for funding the expensive Civil War.

Originally, April 15 was not the deadline but March 1, which is when you were supposed to submit all your income taxes by. But in 1918, the date was shifted to March 15 by the Congress. Again in 1954, the tax date was changed and moved to April 15, which is still prevailing and is known as the tax deadline ever since.

Individual taxpayers need to file a return or take an extension of date (Form 4868) by the 15th of April. March 15 is the deadline for the legal or corporate sector for filing their tax return or taking a date extension. What this extension gives you is some extra time for filing the tax return, not for paying the money that you owe.

Post Second World War, for a few years, the whole of the country’s tax responsibility was almost equally divided between the individual and corporate taxpayers. Today, this tax burden seems to be moving away from the corporate, and individuals are getting hard-pressed.

Around 1918, while the income tax laws were formulated in America, an interesting event occurred. Till that time, sale of alcoholic beverages contributed a major portion of revenues for the government funding.

Just at that time, the law of Prohibition came into force. The Constitution was amended in 1919 to prohibit the sale and manufacturing of alcohol in the country. Income tax was proposed as the solution for the revenue lost; and in spite of the abolishment of Prohibition, income tax payments were made compulsory.

With the advent of the “New Deal” age after passing the 1942 Revenue Act, there was continual exponential increase of government expenditures and control, and now the average American taxpayers are supporting the million billion dollar National Debt.

Presently, the IRS is taking care of all sorts of tax regulations in the country; the IRS has got 4 departments or divisions: Large and Mid-size Business, Small Business Self-Employed, Tax Exempt and Government, and Wage and Investment. It is the responsibility of each department to govern the relevant tax laws as well as the taxpayers.