Tax accounting is one of the many branches of accounting that solely focuses on policies and processes of preparing tax statements as well as filing for tax payments and tax returns.
The Internal Revenue Code mainly governs taxation in the United States, regarded as the U.S. tax code. It is primarily administered by the Internal Revenue Service (IRS). There are several other federal tax laws, and depending on the jurisdiction, there may as well be specific tax rules and regulations imposed by the state or the local government.
There are various types of taxes, depending on which category you are looking at. For instance, tax can be classified as income tax, expenditure tax, or wealth tax. It could also be categorized into regressive tax, progressive tax, or proportional tax. Direct tax or indirect tax can also be regarded as types of tax. Nevertheless, the bottom line is that taxes are compulsory contributions, regardless if you are an individual or a corporate taxpayer. The rates may vary, and there may be some exemptions, but if you or your property falls under any of the taxable items or institutions mandated by the government, that is non-negotiable.
Taxes collected by the government are used for the betterment of the country and its people. These are the funds used for construction and rehabilitation of public roads, preservation of public parks, museums, libraries, improvement and enhancement of public education and health systems, government facilities maintenance, and a lot more. So, the next time you feel abused for being required to settle some tax liabilities, think of these good deeds that you contribute to.
Poorly Accomplished Accounting Tax Prep: The Consequences
Corporate taxes and individual taxes are calculated differently. For corporate taxes, there are four major business ownerships, as indicated in the Internal Revenue Code – sole proprietorship, partnership, corporation, and limited liability company. The tax laws and regulations vary from one business type to another. Hence, regardless of the niche, size, and net worth, businesses are of no exemption from the U.S. tax code.
Failure to comply could cause your business to face an exhausting series of trials and hearings or pay extravagant fees and penalties. Worst case, it could lead your business to bankruptcy, force closure, or permanent ban.
Since there are various laws governing taxes, there are serious consequences that come with these. Tax evasion and tax fraud are samples of criminal cases filed against someone who files incorrect or incomplete tax statements.
There are some legitimate ways to somehow avoid taxes, like taking advantage of legal tax deductions as indicated by the U.S. tax code, setting up deferral plans to delay your tax liabilities, or participating in some tax credit programs. These tax avoidance methods are legal as part of the Internal Revenue Code or various state tax laws.
However, suppose proven that you intentionally evade or tamper your taxes using illegitimate methods. In that case, that is a different story, and the IRS can take those activities against you. Some examples of tax evasion and tax fraud are an incomplete declaration of properties, incorrect declaration of income or revenue, overstating tax deductions, not adhering to tax withholding requirements for employers, or not filing tax returns yearly.
If proven guilty of tax evasion, tax fraud, attempt to evade taxes, or attempt to tamper tax declarations, one can be imprisoned or fined. Imprisonment of a single tax offense can take up to 5 years, and multiple counts could lengthen the prison term. For the penalties, depending on the law(s) violated, it will cost around $100,000 to $250,000 for individuals, and $250,000 to $500,000 for corporations. One will also be required to pay for the prosecution costs, which is $5,000 or more, and to settle all tax deficiencies should the court issue restitution.
Whom to Entrust Your Taxes
With the consequences mentioned above of any tax law violations, it is vital that one religiously and accurately handle his/her taxes, personal or corporate. This is why it is highly recommended that you only entrust your taxes to licensed professionals.
It might cost you more to hire an in-house or virtual tax accountant than utilizing online tax software, but the chance of accomplishing the tasks accurately is greater with the help of experts.
If you opt to outsource your personal or corporate tax needs, which is proven to be more cost-productive, Bookkeeping Anaheim, CA, is your best option. Here are some reasons why.
- The bookkeeping and accounting services we offer are recognized as one of the most innovative services in the industry today. We have thousands, and counting, of satisfied customers all over the country to support this claim.
- We have streamlined our tax services for more efficient and effective results.
- We only allow our licensed Certified Public Accountants (CPAs) and our tax experts to handle any tax-related tasks you delegate to us. These professionals have years of successful undertakings in the field of accountancy.
- We can provide your business with a better tax planning system to ensure that your company will not be violating any tax codes or regulations.
- Our tax professionals and experts are privy to the processes and requirements of tax filing, so you can rest assured that everything is handled correctly.
- We not only save you from this time-consuming task, but we can also protect you from possible penalties and criminal cases.
- Above all, at Bookkeeping Anaheim, CA, we perform each task entrusted to us with the utmost professionalism and incomparable commitment. We are steadfast in sustaining our specialized services for the benefit of our valued customers.
Tax preparation is only one of the many services we offer here at Bookkeeping Anaheim, CA. We take our job very seriously and do not compromise the quality of our works. Aside from delivering and providing you relevant and accurate outputs, our priority is to help you manage your finances well and assist you in achieving your financial goals. We assess, we plan, and deliver financial business success – this is how Bookkeeping Anaheim, CA, does business. Feel free to contact us so you can personally experience the difference we make.