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Tax preparation services in the USA | Most important information for businesses in the USA

Author: Steve Marshall
by Steve Marshall
Posted: Sep 03, 2018

If you’re running a business or planning to set up a business in the USA, then you would definitely be needing expert tax preparation services to minimize the legal complications in your operations. Companies that offer tax preparation services assist businesses to sustain their growth and maintain a professional corporate environment. Various companies operate in the USA that offer tax preparation services to the businesses and minimize the legal complexities for them.

  • Maya and Associates LLC
  • GGF, LLP
  • S. Sharma Tax, Inc.
  • Jackson Hewitt Tax Services
  • Instant Tax Services
  • Liberty Tax Services

Tax returns

Tax preparation services enable you to accurately file your tax returns in order to avoid any legal hurdles. Tax returns are the reports filed with the Internal Revenue Services (IRS), these returns are filed using the IRS-prescribed forms for various business structures. Tax return reports contain information regarding the taxpayer’s receipts and payment to calculate his taxable income and the amount he is liable to pay in the form of tax.

Why to file US tax returns

Your payroll withholding is the amount withheld in the name of taxes, but it is not always exactly what you should be paying. You end up over or under-paying the taxes due to your income variation. If your taxable income is less than what has been recorded, then you would be paying more than required, and if you have any income other than your paycheck, then you would be paying less than the required amount of taxes. Therefore, you need to file a tax return to reach to an amount that you are actually required to pay. It computes whether you deserve any tax refunds or liable to pay additional taxes.

Tax preparation services provide business structures with an absolute direction on how to file the tax returns. Every business structure is required to file returns using different IRS-prescribed forms, therefore it is important to have the guidance of an authentic tax preparer to avoid any unforeseen event.

  • a href="">Single-member LLC
needs to file returns on form 1040

  • Multiple-members LLC needs to file returns on form 1065
  • A Corporation needs to file returns on form 1120
  • S-Corporation needs to file returns on form 2553
  • C-Corporation need to file returns on form 8832

For the businesses operating in the USA, it is a complicated task to decide which company to opt for tax preparation services. The preparers pull out heavy sums of money from the businesses in the name of tax preparation. The tax preparation industry has become so wide that the forecasted revenues for 2018 are $11 billion, but not all tax preparers exploit the businesses to fill their pockets. Many companies offer tax preparation services in its truest essence and on affordable rates, Maya and Associates is one of them. It offers the preparation services along with beekeeping, payroll, and business registration services.

The cost of tax preparation services

A recent survey conducted by the National Society of Accountants (NSA) concludes that an average cost of professional tax preparation services is $261 with itemized deductions and state tax return, for the form 1040. While a simple 1040 form will be charged at an average rate of around $152.

Further, the NSA extracted the average costs of various forms mentioned below;

For preparing the form 1040 (Schedule C) - $218

For preparing the form 1120 (C corporation) - $806

For preparing the form 1120S (S corporation) - $761

For preparing the form 1065 (partnership) - $590

For preparing the form 1041 (fiduciary) - $497

For preparing the form 990 (tax-exempt organization) - $667

For preparing the form 940 Tax Form (Federal unemployment) - $63

For preparing the form Schedule D (capital gains and losses) - $142

For preparing the form Schedule E (supplemental income and loss) - $165

For preparing the form Schedule F (farming) - $196

These costs might seem high to the respective business models but the benefits that professional tax preparation services could bring to your table are much greater than the costs incurred.

First of all, a professional tax preparer, with his expertise and experience, would minimize your time consumption and hassle of filing the returns yourself. To understand the IRS rules and instructions would require hours for a self-filer.

Secondly, if you opt for the tax preparation services from a preparer who is eligible to use the IRS Free File system and your Adjusted Gross Income (AGI) is less than or equal to $58,000, then you can use a participating Free File Alliance company to file your Federal income tax return.

Finally, the technicalities like deductions and credits might go unnoticed if you prepare your returns yourself.

Tax deductions and tax credits

Tax deductions and credits are the perks that you would be able to attain if you opt for professional tax preparation services. You might miss out on these incentives if you file the returns yourself.

Tax deductions – these are the deductions from your income in the form of childcare expenses, professional dues, and capital losses in previous years, etc. these deductions reduce your taxable income, therefore, curtail the amount of tax that you are liable to pay.

Tax credits – more favorable than the tax deductions, tax credits are incentives in the form of deductions from the total amount of tax you owe instead of reducing the net income to minimize taxes. The Earned Income Tax Credit (EITC) can assist you is attaining the credits if you earn a low or moderate income. There are few eligibility criteria that need to be fulfilled to be able to avail tax credits.

Refundable tax credits

If you qualify for tax credits and the granted credits exceed the amount of tax you owe, then you would receive the difference as refundable tax credits.

For instance, if you owe $2,000 in the form of taxes and the government grants you $2,500 tax credits, then you would receive $500 as an incentive.

Non-refundable tax credits

On the contrary, the non-refundable tax credits are the credits granted only up to the tax amount you owe to the government. If the granted credits exceed the amount of tax you owe, then you would not receive any difference.

For instance, if you owe $2,000 in the form of taxes and the government grants you $2,500 tax credits, then the $2,000 tax would be waived off and you would not receive any difference as a refund.

Keeping in view all the detail provided, opting for tax preparation services could be beneficial for the businesses and individuals both. Therefore, it is preferable to hire a professional tax preparer because the benefits of acquiring tax preparation services surpass the costs incurred to get them.
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Author: Steve Marshall

Steve Marshall

Member since: Jun 24, 2018
Published articles: 26

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