For small business tax accounting needs, it is helpful to hire a tax professional with extensive experience in your field. Most tax accountants specialize in one or a few areas of tax accounting. They also understand complex financial statements and prepare customized financial statements for corporations and individuals, but that alone does not show the complete scope of their services. In the world of small business tax accounting, however, sub-specialty is very common. In fact, it is one of the most popular options.
Small business tax accounting can be broken down into three main categories: self-employed individuals, partnerships, and CPA (certified public accountant). Self-employed individuals are individuals who are primarily responsible for their own taxes and must maintain records of those taxes, whereas partnerships are tax accountants who work for groups, usually partnerships, that are involved in financing, marketing, and selling a business. CPA’s are independent financial advisors who represent the interests of an individual or corporation on a specific tax issue.
Corporate tax accountants prepare corporate financial statements that are required to be filed by government authorities and quarterly reports about the company’s income and assets. These professionals are also responsible for assisting shareholders with certain tax issues. Many corporate tax accountants also work as consultants for larger firms. Corporate tax accounting requires detailed knowledge of a firm’s business model, historical tax data, and upcoming tax considerations.
Taxation is a complex area of study and expertise that many small business owners and entrepreneurs do not have. This is where tax accountants come in. They can offer assistance with issues related to taxation such as working with state governments and implementing complicated tax laws. They are often involved in tax litigation, working with taxpayers to resolve issues with the Internal Revenue Service, state government, or Internal Revenue Service itself. They may also provide legal and financial advice concerning audits, claims for excessive unpaid taxes, or estate planning.
Small business owners and entrepreneurs are best served by qualified tax accountants that understand the ins and outs of tax law, reporting guidelines, and IRS procedures. These accountants should understand payroll requirements, sales and expenses, and be familiar with all of the tax forms and resources. It is important for tax accountants to communicate with their clients in a personal and business-friendly manner. The skill set required is extensive and specialized. Some tax accountants offer their services on a contractual basis, wherein they invoice their clients for their financial statements and perform negotiations for their clients.
Taxation attorneys, also known as tax attorneys, provide a variety of legal services to help their clients with all matters related to the internal revenue department, including issues with the Internal Revenue Service and state tax reporting. Tax attorneys can prepare federal and state tax reports, including filing of federal and state income tax returns. They can also represent their clients in proceedings before the IRS, state tax authorities, and the IRS. They may also provide legal assistance to individuals or small businesses with respect to IRS audit processes. Clients who hire tax accountants to prepare their federal tax returns will often also hire them to prepare federal and state corporate tax reports.
In order to ensure that their clients’ federal and state tax filings are accurate and complete, most tax accountants must be licensed in all states. In order to obtain their license, tax accountants must pass all examinations required by the state in which they wish to practice. In order to become licensed, tax accountants must successfully pass the examination administered by the American Institute of Certified Public Accountants (AICPA), a professional organization recognized by the United States Congress.
