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.
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To ask a question on Tax Talk, go to the “Ask the Experts” page and select “Taxes” as the topic. Read more Tax Talk columns. To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for 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 particular circumstances.
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 higher education
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 deductions available.
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 wealth growth
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 and consultancy.
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 Small Business
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 following:
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 planning.
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 the IRS.
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 longer have to do taxes on your own. You can now benefit from the best tax preparation services offered by dime simple business, the only company that can make the process completely stress-free for you. We are driven by the idea that complex things can be turned into simple things, and we’ll prove that.
Meet your team of seasoned tax accountants in Alpharetta, GA who are looking forward to helping your non-profit, business, or church move forward. We will prevent your organization’s financial future from taking a beating by preparing long-term forecasts, filing your returns, and developing cost-effective strategies. We will stand behind you when dealing with the IRS and keeping up with the ever-changing tax code while looking after 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.