Tax Preparation and Planning
Preparing and planning for taxes is often a stressful and complicated endeavor for most people. Unfortunately, preparing your own tax return can be extremely difficult with today’s complex tax code and may often leave you with more questions than answers.
These days, the majority of people and small businesses use a professional tax preparer to assist with the preparation of taxes. Even if you are just filing a simple return, the rules may change from year to year and it is easy to overlook these changes and submit an incorrect return. By doing your taxes yourself, you may also end up overlooking deductions and credits.
Tax planning is essential to helping you successfully and legally reduce the amount of your tax liabilities. In addition to making sure that your business is tax compliant, we also can suggest tax saving strategies that will maximize your after-tax income.
tax planning specialists offer tax and education planning to assist start-ups, as well as, established businesses. We will provide you with a complete list of the most commonly overlooked deductions so that you can limit your tax liability for the following year.
tax professionals assist you with tax planning by:
helping you to defer income so that you can save money now and pay less taxes in the future
lower taxes on your income so that you can keep more of your earnings
lower taxes on your estate and gifts so that the beneficiaries can keep more of what you have given
lower taxes on investments and retirement distributions so that you can maintain your lifestyle
UNRAVELING TAX HEADACHES AND BUILDING FINANCIAL VISION
Confused About PPP or EIDL?
It is very hard to get access to good information. There is a lot of information in the media and it is hard to stay up to date. It is our intent as advisors to help you get access to this information and help you make informed decisions that improve your life and business.
Your Finances And Tax Planning?
Whether we like it or not, today’s tax laws are so complicated that filing a relatively simple return can be confusing. It is just too easy to overlook deductions and credits to which you are entitled. Even if you use a computer software program there’s no substitute for the assistance of an experienced tax professional.
IS TAX PREPARATION RIGHT FOR YOU?
Preparing your own income tax return can be a task that leaves you with more questions than answers. According to a study released by the US Government’s General Accounting Office last year, most taxpayers (77% of 71 million taxpayers) believe they benefited from using a professional tax preparer.
Here’s what you get…
A personal interview with one of our tax professionals to uncover and discuss all deductions to which you are legitimately entitled. Your tax return will be checked and rechecked by our staff and computer software identifying potential problems the IRS may look at more closely and reviewing the math to limit IRS contacts.
Your tax return can be filed electronically so you will get a refund back quicker. tax professionals will show you how to adjust your payroll withholding to get more money back each week. Why give the IRS an interest free loan for up to 16 months?
You must keep all records, whether they’re electronic or paper-based, for at least seven years
Even if you have a bookkeeper or accountant, it’s up to you to know what records to hold on to.
The records you may need to keep include:
invoices
receipts
wage books
petty cash
banking records
vehicle logbooks
asset registers and depreciation schedules
emails, eg arranging business meetings — especially if you’re claiming for travel expenses to another city or overseas.
If you’re GST registered you also need to have tax invoices for your expenses so you can claim back the GST. You don’t need a tax invoice for income and expenses under $50. If you’re GST registered, you must keep records that can support an expense claim
Keep copies of anything you send to Inland Revenue. Using MyIR makes this easy. Also, hang on to any calculations you’ve done to fill in your tax return, eg when working out what to claim for your home office.
Staying on top of things
It’s easy to let paperwork go when you’re busy with day-to-day business. But having a good system and staying on top of things can make life much easier when it comes to filing your GST and tax returns.
Common mistakes
Not holding on to all the records you need to keep. If you’re audited and don’t have the proof of things you’ve claimed, you can face big penalties or legal action.
Not having good systems or staying on top of things — if you don’t your records will be a mess and you could lose important information.
Not keeping your records for long enough — you must keep everything for at least seven years.
Requirement to Submit Tax Computation
A tax computation is a statement showing the tax adjustments to the accounting profit to arrive at the income that is chargeable to tax. Tax adjustments include non-deductible expenses, non-taxable receipts, further deductions and capital allowances.
Companies should prepare their tax computations annually before completing the Form C-S/ C. Only companies filing Form C need to submit their audited/unaudited* financial statements, tax computation and supporting schedules together with Form C. Companies filing Form C-S are still required to prepare their financial statements, tax computation and supporting schedules and submit them to IRAS upon request.
Records and Accounts Keeping
Companies are required to keep proper records and accounts of business transactions. Using an accounting software helps business improve record keeping and comply with tax obligations. Business can also use the information captured in the software to ensure that operations are effective and efficient. The IRAS’ Accounting Software Register lists the accounting software that are able to meet IRAS’ technical requirements and businesses considering to use an accounting software for record keeping are encouraged to consider those in this list.
Necessity to Make Tax Adjustments
Your company’s chargeable income may be different from the net profit/loss shown in its financial statements. This is because some of your company’s expenses may not be deductible for tax purposes. Similarly, some of the income received by your company may not be taxable, or it may be taxed separately as a non-trade source income.
Types of Tax Adjustments
As a general guide for most companies, you would need to make the following adjustments to your net profit/loss:
Deduct income which is not taxable
Deduct investment income (e.g. interest, dividend and rental) which is to be assessed separately as non-trade income
Add disallowable expenses
Add direct expenses relating to the investment income (to be allowed against the respective investment income taxed as non-trade income)
Deduct Section 14Q deduction for expenditure incurred on renovation or refurbishment works where applicable
Add net investment income such as interest, dividend and rental (after deducting the direct expenses relating to the investment income)
Deduct unutilised capital allowances brought forward from previous YA where applicable
Deduct capital allowances (including enhanced allowances under the Productivity and Innovation Credit scheme) for the current YA if you wish to claim for capital allowances on fixed assets
Deduct unutilised losses brought forward from previous YA where applicable
Deduct unutilised donations brought forward from previous YA where applicable
Deduct donations made to approved Institutions of a Public Character (IPCs) if any.
Tips for Organizing Documents for Your Tax Preparer
What Tax Documents and Information Should You Have Ready?
Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) “Every person that files a tax return needs to have their identification, Social Security number or ITIN. All individuals that receive income tax documents need to bring those to their tax preparer,”
If you don’t have a Social Security number, you’re required to have an ITIN. According to the IRS, the ITIN is a tax processing number only available for certain non-resident and resident aliens, their spouses, and dependents. It is a nine-digit number beginning with the number nine and formatted like an SSN. To obtain an ITIN, you must complete IRS Form W-7.
W-2s
A W-2 states your wages and withheld taxes. Your employer should have sent you a W-2 prior to February 2, 2015. You should contact your employer if you haven’t received this form.
1099 Forms
There are various 1099 forms. You may or may not receive one (or many) depending on your situation. According to the IRS, “If you made or received a payment during the calendar year as a small business or self-employed (individual), you are most likely required to file an information return to the IRS.” The IRS suggests requesting the form from your employer if you do not receive one.
Depending on your situation, you might need some other documentation to prepare your taxes:
Brokerage account statements and tax forms (which should include your cost basis for figuring capital gains and losses)
Receipts for donations, business costs and other tax-advantaged expenses
State income tax, property tax, and sales tax documentation
Other documentation related to income, such as alimony (child support isn’t usually taxed), jury duty pay, unemployment benefits, Social Security income, etc.
Any other documentation required to prove that you’re eligible for tax credits and tax deductions (including medical expenses, casualty losses, moving expenses, job hunting expenses, etc.)