Friday, February 28, 2014

How To Prepare For Tax Season Ahead Of Time

By Maryl Joop

Completing and filing taxes can be challenging depending on how complicated your tax claims are. For some it may be simple and require little effort or people may choose the option to have a professional file taxes for them. However, individuals that own a company or real-estate will require more complicated filings.

It is important to know the various tax filing options available and to seek professional help from a tax professional or accountant. There can be many complications if taxes are not filed properly or may have errors.

First, it is important to understand that there are 2 primary ways to reduce the amount of taxes you pay. Deductions and credits both take money off the amount of taxable income but they are slightly different in how they affect how much money you save.

Deductions are run on a percentage basis that varies depending on the amount of income you make. Meaning that if you claim $4000 on a deduction and fall in the 25% bracket, you get a deduction of $1000. Credits, on the other hand, are good for 100% of their value. If your credit is $1000, you get the full $1000 taken off the total taxes you owe.

Did you make any donations last year to your church or another organization? Hunt down every possible deduction to reduce the amount you may owe. This is where having a CPA or tax filing company can come in handy.

It is clear that researching and finding out what tax credits you may qualify for is worth considering.

Taxes also can become a venue for tax crimes or may include individuals or companies are delinquent on their taxes. In this case the IRIS can take minimal to strong legal actions against such parties if the law is broken.

Those who commit tax fraud or avoid paying their taxes or committing fraud in most cases will require a tax lawyer. Having a professional who can support and protect the interests of these individuals is vital in order to reconcile offences or settling on debts.

There are several more deductions that you can claim depending on your situation. The best way to reduce your taxes and get a better return is to take the time to learn which deductions and credits you qualify for and take advantage of each one.

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