Finding a CPA for tax-planning purposes
I’m writing to you to find out if you know
where I could go or who I could consult with regarding how the IRS would
interpret a particular capital gains issue. I act as power of attorney for my
mother, who has late-stage Alzheimer’s. She is income-poor and holds a
considerable amount in stocks with a very low cost basis. I’m hoping I can sell
these stocks and generate cash to take care of her without incurring a big tax
liability. Thank you for your consideration.
You should consider seeking out a certified
public accountant, or CPA, who can help you figure out the most tax-efficient
way to get the funds you need for your mother’s care.
If you have never used a CPA before, you
could ask for referrals from family, friends and even the stockbroker who
handles your mother’s stocks, if that is the case. Additionally, many CPAs are
members of their local chamber of commerce, and you can use that as a resource.
You should be prepared to discuss your
mother’s entire financial picture, including not only her income sources such
as Social Security, stock dividends and interest, but also all of her financial
requirements for the care she needs at this time of her life. You will also
need to know what other assets she owns besides the stocks, such as her home.
Ask the adviser
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you that any U.S. federal tax advice contained in this communication (including
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the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii)
promoting, marketing or recommending to another party any transaction or matter
addressed herein. Taxpayers should seek professional advice based on their
Importance and Benefits of Tax Planning
Tax planning should be an integral part of
your finances. It’s your loss if you don’t make use of the available deductions
and exemptions to save on taxes. Paying taxes is a way of contributing to the
nation’s development, but when the government is providing you with options to
save taxes, it is only wise to do so.
Importance of Saving Taxes:
Let’s understand tax planning and its
benefits with the help of an example. Consider Akash, an IT professional living
in a metro city with annual compensation of Rs 16 lakh. He is currently
repaying an education loan of Rs 22 lakh which he had availed to fund his
How to Save Taxes?
The Income Tax Act, 1961, provides
taxpayers with several options to reduce their tax payable. Various sections
offer tax deductions, out of which Section 80C is the most popular. Amongst
exemption, claiming house rent allowance (HRA) is the widely used exemption.
The best way to save taxes is to lay out a financial plan as and when there is
a revision in your salary and to stick to it. Also, it is essential that you
make tax-saving investments in the first half of the financial year, so that
you don’t make hasty investment decisions at the end of the year. Furthermore,
it would help if you claimed all the exemptions and deductions you are eligible
for. To do this, you should know and understand the various exemptions and
Section 80C is the most popular section in
the Income Tax Act, 1961. It provides provisions for taxpayers to save up to Rs
46,800 a year in taxes. Section 80C covers several tax-saving investment
options, and investors can choose to invest in any of the options under Section
80C to avail the deduction of up to Rs 46,800 a year. The best tax-saving
option under Section 80C is equity-linked savings scheme (ELSS). It is an
equity-oriented mutual fund scheme, offering the dual benefit of tax-saving and
Apart from ELSS, you can invest in
government savings schemes such as Public Provident Fund (PPF), National
Savings Certificate (NSC), tax-saving FDs, and so on. Cumulative investments in
these options will provide deductions of up to Rs 1.5 lakh. You can also claim
deductions towards your payments made towards children’s school tuition fee and
home loan principal repayment under Section 80C.
What Can You Expect From a Career in Tax?
Though you probably won’t help imprison
gangsters like Al Capone for income tax evasion, as a tax expert you’ll
certainly hunt down creative solutions to surprising problems. Here’s a look at
the tax careers out there and what you’d do in a day at the office.
Tax at a glance
Tax is an unavoidable fact of life – it
affects every person, company and organisation. Everyone wants to save money on
their tax bill. Everybody wishes someone would do the paperwork for them.
What roles are there in tax?
A tax role has two main parts: compliance
Compliance is the nitty gritty of tax – the
paperwork. One key compliance job is to complete your client’s tax return
according to the current regulations and file it on time. Depending on your
specialism, you might do calculations, accounting and paperwork for things like
setting up family trusts or estate planning. At the beginning of your career
you can expect to focus on compliance while you learn the ropes.
Tax consultancy is the problem-solving side
of the tax business. Tax advisors make sure their clients’ finances are
tax-efficient (simply put, they find ways for their clients to pay the minimum
tax possible). It means knowing tax regulations inside out and being able to
take advantage of all the available tax structures, tax breaks and loopholes.
This is what you’ll focus on as a qualified tax advisor.
How to Hire a Tax Professional for Your
Hiring the right tax professional for your
small business is important. Getting good tax help can translate into money for
your business. Ideally, you should form a long-term relationship with a tax
professional so you have someone to call year-round. Because this person is so
important to your business’ bottom line — and will help ease your stress
throughout the year — take the time to learn about the different types of tax
pros, how they can help, and how to choose one.
Types of Tax Advisers
Anyone can claim to be a tax expert. And
people who prepare tax returns don’t have to be licensed by the IRS
Make sure your tax preparer is one of the
Enrolled agent (EA). An EA is licensed by
the IRS. The EA has either passed a difficult test or has at least five years
of experience working for the IRS. Enrolled agents are the least expensive of
the tax pros and often offer bookkeeping and accounting assistance.
Certified public accountant (CPA) and other
accountants. CPAs are licensed and regulated by each state. They perform
sophisticated accounting and business-related tax work and prepare tax returns.
Larger businesses or businesses with complex business tax returns often need
CPAs. The larger CPA firms are expensive. Smaller CPA firms are cheaper and may
be better for the typical small business.
Tax attorney. Tax attorneys are lawyers
with a special tax law degree (called an L.L.M. in taxation) or a tax
specialization certification from a state bar association. Tax attorneys can be
expensive. But you should consult one if you have a tax problem, are in trouble
with the IRS, need legal representation in court, or need business and estate
Whatever type of professional your business
needs, make sure he or she has specific knowledge and experience in helping
small businesses. It’s even better if you can find someone who already knows a
good deal about your type of business or industry.
How Tax Pros Can Help Your Business
If you find a good tax professional, you
seek his or her assistance in many ways throughout the year.
We’re not your normal suit and tie kind of
CPA’s. We don’t want to just see you once a year when we do your taxes. We
actually want to have a relationship with you and we want to help you plan for
your future. We specialize in tax returns and tax planning with the goal of “no
surprises”. You shouldn’t ever be surprised by a big tax bill or an issue with
Rely on your go-to tax consultants to make
things less taxing
If there’s something that every American
knows about the IRS, it’s that it is too daunting to deal with. All those
calculations, exemptions, and deductions can drive you crazy even if you’re
aware of when and what forms need to be filed. The good news is that you no
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Meet your team of seasoned tax accountants
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your interests as a taxpayer.
Long-standing business relationships. When
working side by side with dime simple business, you’ll always have a team of
experts at your service, no matter the issue. We are not like those
“specialists” who only show up before the deadline to file your tax return and
then disappear for months. We are here day and night to help your organization thrive
and secure its financial future.
Invaluable assistance for all. Regardless
of what type of organization you’re managing – a small business or a church –
we can make sure you’ll never be landed with a huge tax bill. Our capabilities
allow us to protect the interests of all while providing hassle-free tax return
services and more.