It is a requirement that individuals and businesses file tax returns. Before income tax returns are made, an exercise of tax preparation has to be carried out. In most cases, it is carried out by someone other than the one who is paying the tax. A tax preparation exercise is important to both individuals and businesses because it ensures a smooth process when filing tax returns. Sometimes the exercise is carried out using the assistance of tax preparation software. The exercise can also be carried out with the assistance of a licensed professional such as a certified public accountant, a tax agent, or an attorney. It is important to follow the stipulations that are provided by the various state laws on how the tax reparations should be carried out.
Changes that have been proposed in tax preparation requires that those to be involved in the exercise be registered. It is further suggested that the tax preparation professionals should undertake an exam on the national tax law so that they can be licensed. It has also been proposed that they should be undergoing continuous education. Professionals involved in tax preparation such as attorneys, public accounts and agents would however not be required to be enrolled for the education since the nature of their profession ensures that they are in continuous education program. It is also proposed that the tax preparers should have a practitioner tax identification number (PTIN).
Engaging the services of a professional tax preparer is important in that it enables one to keep their business profitable. However, most of them have yet to be convinced that it is worth to outsource the services of book keeping. An efficient book keeping system is however critical as it helps in the operations of the business.
Bookkeeping is crucial because it can make or break one’s business. Poor book keeping does not only make the day to day running of the business disorganized, but can also lead one to be jailed. In ensuring that the a business remains profitable and accountable, it good that one does proper book keeping. Failure to have organized books of accounts that are disorganized can lead to disqualification by tax preparers. Having proper books of accounts is important in keeping the history of a business. There are some certified public accountant professionals who not only handle the taxes, but also take care of book keeping, payroll and book keeping. This enables the business owner to focus better on their core competencies.
During the exercise of filling returns, the person who is well versed with the books and accounts should be in a position to provide the crucial details and also answer financial questions. If you let a certified public accountant handle the books or set up a system of bookkeeping, it helps to streamline the process enabling to save time and money.