Only one-third of Americans like to file their own taxes. Most people enjoy the peace of mind that comes working with hiring professional tax services, or at least a relative that understands the tax system better than they do.
Taxes aren’t something to take lightly. If you make a mistake, you could either lose money necessarily or gain money that you shouldn’t. If the latter happens, you could end up with an unfortunate letter from the IRS.
If you want to avoid these not-so-friendly letters from the IRS, have your taxes filed properly, and ensure you pay as little as possible each year, there are various types of tax services to know about.
Wondering when to hire someone to do your taxes? Keep reading to learn about the most important tax services below.
1. Personal Tax Filing
The most common type of tax service is the filing of a personal tax return. Every January, tax season opens up and it’s time together with your documents and files your taxes.
If you have a single W2 job without a complex financial situation, then filing your taxes is pretty straightforward.
But most people don’t have it that easy. Many people work multiple jobs. And millions have some amount of self-employment to consider. With self-employment comes the opportunity to save a lot of money by writing off business expenses.
If you want to maximize tax deductions and increase your chance of receiving money rather than paying money, then work with professionals to file your income tax return.
2. Business Tax Filing
If you’re a freelancer or small business owner, there’s a good chance you’ll just pay your business tax as personal income.
But as a business grows, it becomes necessary to treat your business as a separate entity. Businesses will need to file their own taxes, which can be much more complex than personal income taxes.
Without the right tax strategies in place, businesses can end up paying much more in taxes than they need to. Working with tax professionals that understand the ins and outs of the business tax code is essential to keeping more of your revenue in your business.
3. Tax Planning
Tax planning is not the same as tax filing. Filing is the process of telling the IRS how much money you made and paying the appropriate amount of taxes to them.
Tax planning is everything that happens before you file your taxes to ensure you owe as little as possible. It’s an additional service that will make the filing process easier and much less costly each year.
Working with a tax planner is essential if you expect, or have recently made, any major life changes. Buying or selling property, getting married or divorced, having children, starting ab business, retiring, and many other activities require tax advice from professionals to set you up for success next tax season.
Diminishing Your Tax Burden: All About the Importance of Tax Planning
4. Tax Resolution
If you aren’t a tax expert and have filed taxes on your own, there’s a chance you could end up with a letter from the IRS. And it might not be a good letter.
If the IRS suspects you didn’t list all of your income and paid less in taxes than you should have, they might select you for an IRS audit.
Tax professionals offer tax resolution services to help you after receiving a letter like this. They will ensure you respond appropriately, but also in a way that protects and prioritizes your interests rather than those of the IRS.
5. International Tax Filing
The world has gotten smaller and Americans are finding it easier to travel the world, spend time outside the US, and do business worldwide. As a result, tax implications can become much more complicated.
Do you owe US income taxes if you spend very little time in the US? What happens if you make a large gift to a relative living abroad? What if you conduct business outside the US?
If any of these questions arise this tax season, you’ll want to work with tax professionals who are versed in how the US handles tax issues with other countries.
6. Quarterly Tax Analysis
Waiting a year to file your taxes can be stressful, as you never know how much you could expect to owe based on life events throughout the year. Luckily, many tax professionals offer quarterly tax analysis services to help you have an accurate picture of your tax burden in real-time.
You can see how each major event you undergo impacts your taxes so that there are no surprises next spring.
7. Tax Minimization Strategies
It’s depressing to work so hard, earning money that you deserve, only to watch huge chunks of it disappear into the hands of the IRS. If you’re committed to keeping more of your hard-earned income then you need to work with tax professionals that offer tax minimization strategies.
With the help of professionals, you can implement well-known strategies to ensure you pay as little as possible to the government, even as your personal income rises.
Tax minimization strategies involve putting money into the right investment vehicles, planning for retirement, and creating tax-efficient assets and events such as businesses or charitable trusts on your behalf.
8. Tax Relief
After everything is said and done, you might still be stuck with a large tax bill that you didn’t expect. In many cases, the tax bill may be higher than you can afford to handle at the moment.
However, the government will still expect to receive their money. In these cases, you’ll want to work with professionals that offer tax relief services. They can provide guidance for recovering from large tax burdens, and may help you to organize installment payments and negotiate a compromise to keep you in the clear.
Enlisting Professional Tax Services
The world of taxes is incredibly complex. That’s why you should always enlist the help of professional tax services that prioritize your needs and goals above the government.
At Basta + Croop, we offer a wide range of tax and accounting services to provide you with a one-stop-shop for minimizing your tax burden and maximizing your personal and business finances.
Contact us today to make tax season as easy and painless as possible.