How to Make Filing Your Income Taxes Easier For Your CPA
Filing Taxes
It’s tax season, and if you’re like most small business owners, you are probably beginning to feel overwhelmed just thinking about all the things you did in 2016 that you may or may not have recorded.
Despite how overwhelming it may feel there are tips which you can utilize to help alleviate the stress which often follows tax season. Here are some ways you can make filing easier for your CPA.
Compile and organize all your records
While it can be easier said than done, make sure you organize and compile all your records. If you are tech savvy, keeping a digital record of your expenses can make your accountant’s job easier. If you’re not so tech savvy, make sure you keep all your files in organized folders in order to ensure that they are easy for your CPA to navigate.
Report all of your income
If you learn how to report all of your income, you will never have to worry about how to protect hidden income. If for some reason you’re not completely sure if you should report it, report it. It’s better that you over report than under report.
Make sure your deductions are correct
Aside from forgetting about any additional income you may be bringing in, more filers do not include all of the deductions to which they are entitled. This could include office supplies, computers, hardware, business trips, out of home client meetings, and others. If you’re not sure if something qualifies for a deduction, don’t be afraid to ask.
Know the difference between tax deductions and tax credits
While tax deductions and tax credits are similar, they are not identical. Tax deductions lower your taxable income, and tax credits help subtract against your tax liability.
Knowing your filing status
Your filing status will determine the rate at which your income is taxed. Knowing your filing status before you file is important because your status affects everything else about your tax situation.
What other tips do you think have been important to keep in mind in order to help your CPA file your tax returns? Leave your comments below.
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Why Hiring a CPA May Be Better than Using a Tax Software Program
CPA or Tax Software
It’s tax season, and if you’re trying to save every single dime in your pocket you are probably leaning toward the taking the cheapest route to filing taxes. One of the easiest and cheapest ways to file your taxes is by using a tax software program such as Turbo Tax. Though Turbo Tax can be a great way to file taxes, it’s important to note that there are numerous reasons why you should consider passing on Turbo Tax and instead hire a CPA.
Here are a few of these reasons:
- A CPA can represent you in an audit and Turbo Tax (or any other tax software) cannot
- A CPA can help you find ways to save money on your taxes
- A CPA can help you itemize even more deductions than any tax software program can
- A CPA can ask questions in order to get additional information about you and your tax history
- A CPA can help you correct any errors you make when filing your taxes
- A CPA can help you get an even bigger tax refund by asking you questions that Turbo Tax wouldn’t know how to ask
While these are not all the reasons why hiring a CPA is better than using tax software, it is a great start. What should be noted is that hiring a CPA brings a personal touch to your tax filing, and while working digitally may seem efficient, it’s not always effective, especially as it relates to your financial needs.
Ultimately, during tax season, whether or not you hire a CPA vs. using tax software is solely up to you and your business.
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