Benefits of Using Professional Tax Accountants

Tax accountants know tax accounting fundamentals and prepare individual tax returns for individuals and companies, but that is not the extent of what they offer. The field of tax accounting includes services ranging from the basic preparation of individual income tax returns to complex multi-step tax strategy services for large multinational corporations. Some accountants offer their services exclusively to individuals, while others work on contract for large accounting firms or provide tax consulting services. There are also certified public accountants (CPA) who attend a CPA National Examination Program (CPAP) in order to become a CPA in the United States. They must pass the CPA National Examination and then take a test administered by the Institute of Taxation and Business Portability, which is a division of the U.S. Department of the Treasury.

CPA examiners undergo comprehensive training at both the education facility and in classroom sessions. After the training, they are evaluated by an independent panel of tax accountants and business representative to determine their competence in providing tax accounting and tax code advice to clients. CPAs have the knowledge of the taxation laws of each state, U.S. cities and counties as well as federal tax code. In addition to this, they have in-depth knowledge of financial and business laws applicable to taxpayers.

Clients call upon accountants to examine financial statements, prepare internal and external reports, formulate and provide recommendations concerning tax treatments and audit tax accounting methods. Clients may obtain professional tax accounting services from individual tax accountants, or from a tax preparation and distribution company. Some accountants work independently and some are employed by larger firms. Some work on contract basis with small local firms or with large international tax accountants.

All tax accounting methodologies involve maintaining financial records. Generally, records are prepared by a group of accountants who prepare financial statements. These include bank reconciliation statements, income statement analysis, balance sheet reports, operating and statement presentation accounts, income tax liabilities, and financial documentation statements. Before preparation of a financial statement, the accountant should gather all relevant information regarding the assets, liabilities, revenues and expenses of the client. The required information will include client’s payroll and receipts; date of birth of client and tax filing status; address of the client; contact person(s) including payroll carrier, tax payer’s agent, and designated driver. Information about the client’s other financial records is also necessary.

Apart from preparing financial statements, an accountant also prepares corporate tax statements. Corporate tax accounting methodologies include accrual basis for tax payments, corporate tax planning strategies, compliance verification, internal control systems and government reporting requirements. Certified public accountants (CPA), who have the necessary licenses and certifications are preferred over solo practitioners in corporate tax accounting. They are specialized in tax planning, management, and audit services.

Taxation is complex and tax accounting is needed to make it simple. Many people do not have adequate knowledge of taxation, and as a result, they do not utilize the available tax benefits efficiently. Lack of knowledge also leads to inefficient utilization of tax benefits. Hence, the need for tax accountants, who have sound knowledge of taxation law, taxation principles and laws, and tax laws, is very essential. Accountants play a vital role in the proper utilization of tax laws and act as a guiding force towards tax compliance.

There are many benefits of employing tax accountants. For instance, tax accountants provide excellent advice and assistance to businesses and individuals. They provide professional tax planning, assist in managing and implementing complex tax schemes, and ensure compliance with legal obligations. They facilitate smooth administration of complex tax laws and regulations, and offer excellent support during tax audits and appeals.

It is not easy to prepare tax returns on your own. It may even take several months before you can gather all the necessary information and records to properly file your return. That said, if you hire professionals to prepare your return, they would be able to collect all the necessary information in a short period of time, thereby saving you from unnecessary stress. Apart from that, tax accountants can also help improve efficiency by reducing the errors and omissions that commonly occur when preparing tax returns. These professionals can even help prepare accurate returns and keep them for longer.