Our goal in preparing income taxes is to assist clients in timely filing their taxes, reporting their income, and reducing taxes with deductions as allowable by tax laws and accounting rules as determined by an experienced C.P.A. and tax lawyer on your side.
The four specific steps in achieving this goal are:
- First: exclude from taxation the income and gains that you can.
- Second: defer that which you must report.
- Third: reduce that which you must report with deductions and capital classification.
- Fourth: pay taxes on the rest on the latest date without incurring penalties or interest.
Some of the basic strategies we employ while preparing all tax returns include:
- Having knowledge of the tax laws as both a lawyer and Certified Public Accountant. Many tax laws are not black or white, but rather gray. Through experience and education, we apply the tax laws to your specific financial circumstances in the best light possible for you.
- Rarely do we refrain from taking deductions solely due to a high risk of an audit. We believe it is better to be prepared to prove deductions than to forego them. We provide recommendations as to the best evidence for sustaining deductions.
- Some deductions are not allowable unless they meet additional requirements. In our tax preparation practice we use descriptive or specific language for certain deductions to signal to the IRS that the taxpayer does indeed qualify for the deduction.
- We reduce your risk of audit by following IRS and state instructions for compliance presentation. However, we do not rely on the IRS’s or a state’s substantive opinions of the tax laws found in their instructions.
- We thoughtfully respond to the required questions on tax forms. They are asked to help the IRS to determine whether or not they believe a taxpayer is entitled to certain deductions. The answers provided, or the lack thereof, are considered when determining whether to audit a taxpayer.
In addition to quality tax preparation, tax planning reduces taxes. Tax planning should begin early in the year, and many times, it is an ongoing process.
Tax planning consists of identifying and implementing strategies to reduce your taxes. There are two types of tax-saving strategies. The first is merely taking advantage the current tax laws and implementing the basic “tried and true” strategies that exist each year. Competent tax representation and good communications with him or her typically achieves that goal.
The second method is a more proactive approach. It involves working with your tax advisor to at least being aware of the general tax laws for your situation and adjusting your circumstances to qualify for targeted tax benefits. With that said, how does one know they are saving taxes? Many times it is difficult to define “a tax savings.”
However, the following are 10 characteristics of good tax planning: Characteristics of Good Tax Planning
Year End Tax Planning
Tax planning at year end can be quite productive. Many times implementing easy strategies will save a lot of money that is otherwise due in a few months. At minimum, you can avoid unpleasant surprises. Please see our section “Newsletters & Tax Tips!
Many times tax problems start or are exasperated with failing to timely file. Get an extension if you can’t file on time even if you cannot fully pay. Filing timely, including extensions avoids the costly late filing penalty and helps preserves important Bankruptcy rights.