Tax Accountants informations. Most people only think about their income taxes in March or April. Tax accountants think about them all year round, and that pays off for you in a big way. These savvy professionals keep up-to-the-minute tabs on frequently changing tax laws and scour the tax code looking for ways to help their clients get bigger refunds. They also home in on each client’s unique situation to help them keep more of their income now and in the future.
And while popular tax prep mills give their representatives at least some basic training, that training is usually focused more on using the company’s proprietary software than in understanding the tax laws and utilizing money-saving strategies for clients. These enterprises emphasize volume, trying to churn out as many tax returns as possible, instead of paying attention to high-quality personalized service.
A seasoned tax accountant, particularly a CPA, will cost more than do-it-yourself software or tax preparation chain stores. However, if your financial picture is more complex than a W-2 and a standard deduction, it may be well worth the expense to hire a qualified professional tax accountant who can find you even bigger tax savings for the current year and beyond. The bottom line is, you really get what you pay for.
Here’s the golden rule of taxes:
Tax evasion is illegal; tax avoidance is the American way. While tax avoidance sounds illegal, it’s not. What it really means is figuring out the absolute minimum taxes you owe legally using existing laws, deductions, and loopholes. That’s why, despite the fact that the market is full of do-it-yourself tax software, people still go to accountants to get their annual income taxes prepared and filed.
CPAs know that the best way to slash your tax bill is to reduce your taxable income as far down as it will go. That can slide you into a more favorable tax bracket, where your income is taxed at a lower percentage. Other completely legal strategies may involve:
• Taking advantage of every available tax credit
• Maximizing tax-free income
• Shifting income
• Maximizing deductions
• Deferring taxes
Your tax accountant will identify which of these strategies you can use to minimize your income tax bill. Some are incredibly simple to employ, others can be tricky, and truly call for professional guidance. As long as there’s no fraud, theft, or deception involved, you’re well within your rights to avoid paying even a penny more in taxes than you have to.
TAX IDENTITY THEFT ON THE RISE
Millions of Americans have fallen prey to tax identity theft, and agency insiders worry that the numbers may get worse. This crime has caused widespread systemic problems over the past several years, and it takes a terrible toll on the victims. During the 2016 tax season, nearly 60 percent of CPAs surveyed had at least one client who had fallen victim to this fraud, according to the Journal of Accountancy. Many of these clients had no idea that the theft had occurred until they went to file their returns.
Here’s how the scam works: A criminal gets hold of some basic personal information, including a social security number. Then they go to the IRS website to get a copy of the individual’s tax return from the previous year. This gives them a wealth of additional information. The thief then uses that information to create and file a fake tax return, directing the refund to himself. When the real taxpayer goes to file his return, it’s rejected because a refund has already been issued to that social security number. As you can imagine, it’s very difficult to resolve this problem and get the refund that’s really owed to you.