The National Association of Enrolled Agents, founded in 1972, is an industry organization to help independent, licensed tax practitioners achieve and maintain the highest standards in the field. With 11,000 members, the group offers enrolled agents continuing education in all areas of taxation.
If you support someone financially, then 9 times out of 10 that person will count as a dependent and you will be able to claim them on their taxes. The exception to this is if you support a friend or relative who isn’t a direct descendant.
There are distinct differences between a financial planner, accountant and Enrolled Agent. While a financial planner can give you advice on investments, an accountant or Enrolled Agent can advise you on the tax repercussions the investments will bring, and an EA can speak to the IRS on your behalf.
With the help of a good financial software program, an experienced accountant can help you to analyze the cash flow in your business, to make periodic checks on your inventory and to make the best decision on financing opportunities.
A business establishment having less than twenty-five employees shall come under the small business health care tax credit. It should also have paid the health premiums of at least half of its employees.
The Internal Revenue Service requires Enrolled Agents to keep up-to-date with continuing education. They must complete 72 hours of classes each three-year enrollment cycle as well as 16 additional hours — including two hours on ethics — each year they are enrolled.
Analyzing financial statements make it possible for an accountant to spot a potential problem in your company before you realize it exists. That could be some type of cash-flow problem or perhaps a shortage of inventory.
Writing a business plan? You may need financial projections and other reports that a small-business accountant can provide to create a professional, successful plan.
In addition to helping with tax returns, tax accountants can also help with tax planning. With proper planning, your potential taxes are more easily anticipated and you are better able to manage your income.
If you are facing a tax problem (such as filing back taxes, paying off a tax debt, or fighting an IRS audit), then hiring an EA accountant is a good option. These tax professionals specialize in the resolution of complex tax challenges and issues.
When keeping records of your business expenses and charitable donations, it is important to keep business finances separate from personal finances. Set up separate checking accounts, and write yourself a check or make a cash withdrawal when your small business needs funds. Tracking expenses and budgeting will be much easier when you keep personal and business finances separate.
According to the IRS, “An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee.”
Are you ever hesitant to file your tax return because you aren’t totally clear on what small business deductions you were eligible to claim? If you need solid answers, not educated guesses from tax preparers, we’re always here for you.
On average, most firms charge an hourly fee, which can range from $100 to $275 per hour. If you need to discuss a better financial plan, you might be able to negotiate a flat fee.
It’s important to remember that there’s no shame in admitting you can no longer complete your taxes on your own each year. With the tax code constantly changing, it’s often best for people to work with a tax accountant who’s been able to keep up with all the changes.
Do you ever worry that your complicated tax situation is getting too difficult for you to continue handling on your own? Whether you need help preparing returns or simply getting a handle on things, it’s smart to work with an experienced tax accountant.
When choosing an accountant, do your homework. Check their qualifications, ask for referrals and ask probing questions about what value they can bring to your business.
Did you know that the enrolled agent profession dates all the way back to 1884, when there was a trend of questionable claims being presented for Civil War losses? At this time, Congress acted to regulate persons who could represent citizens in their dealings with the Treasury Department.
Did you know that over 90% of small businesses fail or change ownership within the first five years? If your business fails under a sole proprietorship, you do not have to worry about communicating with or filling out special forms for the IRS. You simply file a Schedule C with your next return and stop doing business.
Accountants can take your stress away from taxes, and they can save you money on your tax bill as well!
When you first switch to an EA, you may worry that you aren’t taking advantage of all the tax deductions you used to. Remember, working with an EA ensures you aren’t taking deductions you don’t qualify for, which will save you time and money if the IRS chooses to audit you.
Accountants can be very useful at certain stages of your business development, whether it be for your income reports or tax returns.
Remember to include insurance as a deduction for your vehicle on your federal tax return. If you use your car for business purposes and choose to deduct the actual expenses instead of the mileage, then depreciation, gas, oil, tires, licenses, repairs, and insurance premiums are deductible.
Reconciliation and keeping up to date entries is vital to a small business owner. If the owner waits months without making any entries or reconciling any statements, it can be very difficult to actually make business decisions, as the owner wouldn’t know the standing of their financials.
Being recognized as an Enrolled Agent is the highest credential the IRS awards and maintaining this requires adhering to their rigid ethical standards and completing a minimum number of continuing education courses every two years.
If your income is over $200,000, then it's vital that you get a good tax accountant, since you are much more likely to get audited. In fact, when an income reaches that level, the odds of being audited go from 0.9% to 3.7%.
Are you aware of the difference between cash and accrual accounting? Under an accrual method, you generally report income in the tax year you earn it, even though you may receive payment in a later year. You deduct or capitalize expenses in the tax year you incur them, whether or not you pay them that year.
If you are currently being aggressive about saving money, then hiring a tax accountant can help you to maximize your success. Accountants can be invaluable in identifying the best vehicles to use for tax deferred or tax free savings plans.
When it comes to your tax situation, an EA accountant is able to provide valuable guidance in a wide range of situations. This includes starting a business, renting a home for additional income, and selling or buying a home.
Charitable donations do not have to meet a specific threshold to be deducted. As long as you donate to an IRS-qualified organization and have appropriate records of the contribution, you can claim your full donation as an itemized deduction. Many people wait until the end of the year to give; consider making donations early in the year to help organizations during a time when funds may be low.
