Whether tax season is fast approaching, or the year has just started, it is never too early to begin preparing your taxes. Leaving this task for late in the year can result in forgetting to include vital information or worse missing the tax deadline altogether. Being prepared in advance of tax season will save you a lot of trouble. If you or a family member needs assistance preparing their taxes, you should consult with an experienced Central Oregon certified public accountant (CPA).
With over 30 years of tax preparation experience, CPA Ted Kleinman is here to help you efficiently prepare your taxes. US Tax Help understands how difficult it can be to make sense of various types of tax law that may apply to you and your business and he is here to guide you through the process. To schedule a consultation, contact US Tax Help at (541) 923-0903.
Why Do I Need a Tax Preparer?
Taxes are an ever-changing landscape. There are constant regulations that address various topics like taxation rates and tax exemptions for real and personal property. With all of these moving parts, it is important to understand the invaluable role that tax preparers play and the reasons why you need one.
One of the first factors you should consider when you are on the fence about hiring a tax preparer is how well you understand the tax return process. While the tax return process certainly includes various documents like W-2s, 1099s, or Schedule K-1s if you invested in a corporation or limited liability company, there are many other factors that you must take note of when preparing taxes.
Deductible expenses are one factor that you should be mindful of when you file taxes. A deductible is an expense that is subtracted from your adjusted gross income. This means that a deductible expense decreases your taxable income which in turn decreases your tax liability. Over the course of the year you may accumulate all kinds of deductible expenses like the interest on your mortgage, property or cash given to charity, and even student loan interest.
If you are a foreign business owner and you conduct business in the U.S. and various parts of the globe, you will have to be especially keen when calculating income and deductibles. You will also be responsible for picking the correct forms you need to report all taxable transactions. This process can become quite complex if you are a business owner. In addition, if you are engaged in buying and selling stocks, providing financial support for another person, or you have multiple sources of income, you may have trouble keeping all of those issues in order when preparing your taxes.
If your tax return will require that you make sense of several lengthy IRS provisions, a certified public accountant may be the answer to your problems. CPAs have to meet extremely demanding educational and experience requirements to deal with taxes. They must also pass a rigorous exam to become certified and have a duty to keep abreast of new tax regulations that can affect individuals and businesses nationally and internationally. A CPA like Ted Kleinman will work diligently to make the most out of your tax returns.
Tax Prep Checklist
The United States has different tax laws depending on whether you are a U.S. person or a foreign person. This means that one of the first tasks on your tax preparation checklist should be understanding which definition of person that you fall under. The following is a list of foreign persons for tax purposes:
- Nonresident alien individual (green card test or residency test)
- Foreign corporation
- Foreign partnership
- Foreign trust
- A foreign estate
- Anyone that does not qualify as a U.S. person
The next list defines the meaning of a U.S. person for tax purposes:
- A resident or citizen of the U.S.
- A domestic corporation (incorporated in the U.S.)
- Domestic partnership
- Non-foreign estates
- A trust that is controlled by a U.S. person or can be controlled by a U.S. court
- Any individual who does not qualify as a foreign person
If you are a nonresident alien, the U.S. income tax will only apply to income derived from a U.S. source. It is important to note that your U.S. source income is affected by two different tax rates for effectively connected income (ECI) and fixed or determinable, annual, or periodic (FDAP) income.
ECI refers to income that is produced by the operation of a business in the U.S. or personal service income like money made from wages or from self-employment. ECI is subject to a graduated tax rate which means the rate of tax will become higher or lower depending on the amount of taxable income.
FDAP refers to income sources like rent, royalties, dividends, interest, and other sources of income that is passively collected. FDAP income is taxed at a flat 30% rate unless some regulation or tax treaty allows for a different rate. Some tax forms that we can help you prepare if you are a nonresident alien include Form 1040NRs or Form 1040NR-EZs.
Foreign corporations, foreign partnerships, and other foreign persons are also subject to taxes on income that is earned from sources within the United States. US Tax Help will create a tax preparation plan that aims to take advantage of all the tax incentives that your business has earned. Allow us to handle your tax preparation so that you can continue to efficiently run your business.
It is also important to note that if you are a US expatriate (you live outside the country) you may still have U.S. tax obligations, or you may have to report foreign income to offset your U.S. tax liability. This process can become complicated, but an experienced CPA can help you streamline it.
US Tax Help will also guide you through new tax regulations. For example, the Tax Cuts and Jobs Act of 2017 will be implemented soon. This regulation would reduce various individual income tax rates and would reduce the corporate income tax rate as well. These are just two provisions in a large act that will likely have a profound impact on the way you file your taxes.
U.S. and International Tax Services for Foreign Persons and Expatriates
There is no such thing as being prepared for tax season too early. US Tax Help and tax accountant Ted Kleinman is available to provide you with tax planning services year round. You should begin documenting everything you need to file taxes over the course of the year. Not only will this make it easier for us to help with your taxes, but it could make it easier to discover tax provisions that could alleviate some of your tax burdens. To schedule a consultation to discuss tax preparation, schedule an appointment, or contact US Tax Help online.