Hiring a tax expert could save you thousands in both money and effort, while helping prevent errors that cost more. But not everyone requires professional assistance to file their taxes.
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Self-Employed
Starting your own business or becoming a freelancer can provide greater career freedom; however, with that comes additional responsibilities: you will now need to manage your taxes independently compared to W-2 employees whose employer automatically deducts them from paychecks. Self-employed individuals must assess what taxes they owe and pay them themselves.
Your net earnings from self-employment are generally taxed at 15.3% – this includes 12.4% Social Security tax and 2.9% Medicare tax. But the IRS provides ways to lower this rate, such as subtracting expenses such as business insurance premiums or vehicle depreciation from your total income.
To reduce self-employment taxes even further, keep accurate records year-round of everything you earn and spend using accounting software that works for you.
If you need help calculating your earnings or deductions accurately, speak to an accountant. A professional Atlanta tax attorney will ensure you file accurately while getting the most from your taxes. This can save you time and money in the long run, which can make it worth your while.
Real Estate Investors
As a real estate investor, your investment strategy must include a plan to manage your taxes.
Working with a CPA as part of your investing team is vital in order to optimize deductions, file returns correctly, and stay abreast of new tax laws and changes. A real estate accountant will also know about specific pathways you can follow for property tax deductibles such as 1031 exchanges.
DIY tax filing may seem tempting, but working with a qualified tax expert is often the most efficient and cost-effective solution. A CPA will not only file your return accurately, but can also assist with depreciation schedules and accounting needs for business accounts – leaving you free to focus on growing your portfolio while they take care of more complicated financial transactions that real estate investors face.
A good CPA will understand the intricacies of real estate investment and should be familiar with all applicable rules and regulations, while being able to offer tax strategies to minimize your taxes and provide insight into your investments, such as finding innovative ways to structure deals and defer capital gains.
Search online or inquire of local real estate investors and financial planners for recommendations of CPAs who specialize in real estate investing, taking note of which ones have earned state accreditation, meeting education, work, examination requirements as well as passing the Uniform Certified Public Accountant Exam. You can click here for a license lookup tool from the Georgia state government.
Alternatively, consider engaging an Enrolled Agent (EA). They have earned this privilege either through taking and passing an in-depth IRS test covering individual and business returns or through experience gained as former IRS employees.
Skilled CPAs will help you file your taxes quickly and accurately while minimizing taxes owed. While it may seem unnecessary at first, investing in such professional help could save thousands over time and make tax season much simpler for all involved.
Charitable Donors
Donating to charitable causes requires accurate accounting practices.
Both donors and their tax preparers need accurate records of donations for tax purposes, which includes details on date, value and type. Documents which qualify may include bank statements, credit card receipts or cancelled checks depending on type.
Donors may also give in-kind items like clothing or household goods which they must document their fair market value in order to claim tax deductions.
Large charitable donations can also be structured to maximize tax benefits. Donors expecting their tax bracket to rise next year can “bunch” their contributions now and reduce them substantially in 2024; this strategy can increase their charitable deduction by as much as 60%. You can click the link: https://www.irs.gov/charitable-contribution-deductions to find out more about IRS charitable donations regulations.
Many charities provide donors with annual statements for tax records. These should contain information such as the organization’s name, address and EIN (Employer Identification Number), that no more than insubstantial goods or services were exchanged for donations, as well as when donations were made and when. Donors should maintain copies in case an audit comes up and copies need to be kept on file.
Before donating to any charity, always ask how much of your donation will directly support their programs. You can find this information either on their website or using the IRS Tax Exempt Organization Search tool. Be wary of telephone solicitation efforts as these often are not required to disclose how much of your contribution actually went toward supporting said cause.
When responding to phone solicitations requests for donations, be sure to verify the charity with your state regulator to make sure donations are tax deductible. If not, consider giving to another organization instead; also note that political action committee donations do not count towards tax deductibility.
Business Owners
Small business ownership can be a demanding task, and sometimes managing all finances and taxes alone may not always be practical. Consulting with a tax expert is especially useful for new entrepreneurs or business owners who may be unfamiliar with current laws pertaining to their particular industry or enterprise.
An expert tax advisor should possess at least a bachelor’s degree in accounting, statistics or finance and several years of experience working for either a tax preparation firm or another type of accounting service. Furthermore, these individuals possess extensive knowledge about current and past business tax codes to find deductions or credits that apply specifically to your business while creating a budget to cover future expenses.
Tax experts are adept at handling taxes for a wide variety of situations. They are able to advise you about what records to keep as well as filing deadlines. This information can help you to save money in taxes and fees over time.