3 Surprising Truths About Tax Preparers
Executive summary By Caroline Jordan
A former tax preparer and small business mastermind offers insights into the secret world of tax preparers.
1. All tax preparers are not created equal.
Preparing taxes is a complex activity. Back in my tax preparing days, I worked for one of the big name tax preparation franchises both as a preparer and as a tax return editor.
2. Tax preparers are not business experts.
Tax preparers are trained to understand taxes. Many CPA’s, accountants, bookkeepers, and tax preparers do run their own businesses. Only a preparer who understands business can prepare a return that works for your business.
3. Hiring a tax preparer doesn’t mean you’re excused from understanding taxes.
Good tax preparers are like good hair stylists. The ones who are fresh out of tax class and generally have no experience preparing tax returns or running a business.
Tax Planning – Pay Only What Is Due To Uncle Sam
Executive summary By Cornie Herring
Understanding Your Tax Bracket
Your tax brackets increase as your income increase. Beside the federal government tax which is unable to be escaped for all taxpayers, if you live in state that also taxes you income, you need to pay for state government tax if applicable. For example if you are in the 25% tax bracket for federal taxes and you live in state that has a 5% income tax, you total tax rate should be 30%.
How To Legally Pay Less Tax?
There are many tax exemption and deductions benefits offer to taxpayers. While a tax deduction is something you subtract from your gross income to reduce your taxable income, tax credit is another tax benefits that you can utilize to minimize you payable tax. Tax credits are actually worth more to you than a deduction. Among the tax credits for you to calculate in, if applicable are:
1. Dependent & Childcare Credit
2. Child Tax Credit
3. Education Credits
There are two types of education credits, the Hope Scholarship credit and Lifetime Learning credit.
4. Adoption Credit
5. Earned-Income Credit
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