Paying tax and filing tax returns is mandatory if you live within the country’s borders. There are many types of taxes that taxpayers can be subjected to. For instance, individual taxpayers who derive their income from employment are required to pay payroll tax, which is calculated and withheld by the employer. After deducting payroll tax, employers are required to submit the tax to the IRS within the specified deadlines.
Businesses are required to pay a number of taxes. The first is sales tax, based on their total revenue. There is also excise tax for businesses that offer services. At the end of every quarter or year, when the profit or loss of the business is calculated, a corporate income tax must also be calculated and paid by the business.
Another type of tax is withholding tax on dividends and interest income. For instance, if you have invested in stocks that paid a dividend, you will be required to pay tax on the dividend. This tax is normally withheld by the corporation paying the dividend for remission to the IRS.
It is important to note that calculating your tax bill can be a complicated process if you have multiple incomes. If you spent your money on tuition, acquiring an Energy Star HVAC system or donated to an approved charity, calculating your tax bill can be even more challenging. You can choose to use a tax preparation software, but you may not necessarily get the best results. Furthermore, major tax preparation software have recently been hacked. Others are known to have bugs, which can lead to major errors that can result in a tax audit.
Hiring a CPA
When in need of St Louis tax services, you may want to find a reputable CPA firm that has a team of certified public accountants. CPA’s normally undergo rigorous training and testing before they can be certified to offer public accounting services. For a small fee, these professionals can compute your tax bill and help you do your tax returns. CPA’s know all the tax deductible expenses, tax credits, tax exempt incomes and applicable tax rates for different types of taxpayers, so they can calculate your tax bill or refund accurately. It is important to note that any error in your tax filing can be interpreted in two ways. It can be looked at as fraud, in which case you may be jailed or fined heavily. It can also be looked at as simple human error, in which case, you’ll have to pay the unpaid or undeclared tax plus penalties and fines. An audit may also be carried out on your finances to ensure there is nothing suspicious in your accounts.
How to Find the Right CPA
When in need of tax services, be sure to hire a CPA firm. The first thing to check when looking for a CPA to offer the required services is certification. The ideal CPA firm should have met all the educational and professional requirements to work as a public accountant. Furthermore, they must have been certified by the relevant accounting professional body. Their experience in the industry and fees they charge must also be considered.