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6 Tricks To Offload The Tax Season Burden of Your CPA/Accounting Firm


6 Tricks To Offload The Tax Season Burden of Your CPA/Accounting Firm

Whether direct or indirect, tax is the highest form of revenue for any government. The amount of tax is always proportionate to the valuation of firms, and it cannot be avoided under any circumstances. Tax preparation outsourcing can help CPA firms plan and organize income, expenses, balance sheets, total taxes, and savings.

Even though CPA firms are financial planners, they also need to strategize their firms effectively to reduce the tax burden as much as possible, which is where outsourcing tax preparation services can come in handy.

Even with professional assistance, it would help to understand how you can reduce the tax burden on your accounting firm and minimize your tax outgo. We have listed a few tricks that might help your firm.

6 Tricks To Offload The Tax Season Burden of Your CPA/Accounting Firm

•  Begin With Solid Financial Planning

Proper tax planning and tax-saving start with organized financial systems to produce accurate bookkeeping statements. As any business grows, it requires employees, assets, and capital. Hiring reliable offshore accounting services for tax preparation outsourcing leads to tax savings.

•  Take Care of Depreciation and Leverage Bad Debts

The wear and tear of assets being used constantly in the business must be depreciated every year. It implies that the company’s assets are losing their value and soon will become obsolete. Depreciation is a calculation only, and it does not have any real-time cash flow as it is a non-cash item of tangible assets. 

At the outset, the depreciation cost is always included in the financial statements, and it must always be deducted from the total income. At times, income tax laws provide special provisions when the asset acquired comes under special provisions. Tax preparation outsourcing firms can help with additional depreciation and deduction on taxable income.

When debtors fail to make payments within a standard time, such debts become bad. The same can be claimed for deductions because such an amount was receivable in the financial statements, but the accrued amount is now no longer receivable.

•  Expenses

Expenses can also be claimed to reduce total income. Claiming deductible expenses means deductions can be accelerated in the current year, and income can be postponed to later. Expenses such as performance bonuses, overtime, or yearly bonuses to employees are the perfect examples of deductible expenses.  

On the other hand, such income bonuses to employees, in turn, increase the total income, moving individuals to higher tax brackets. For that purpose, postponing major expenses such as dental treatment in the next year will prove effective, and eventually, the tax bracket will reduce. Tax preparation outsourcing firms can help in acquiring deductions on such expenses.

•  Keep Up to Date With the Latest Accounting Software

Using a spreadsheet for keeping track of complex tax return calculations can leave plenty of room for human errors and financial losses. Using the right accounting software can help solve the problem by automatically creating reports and saving your accounting department valuable time. Tax preparation outsourcing is a good way to let experienced professionals handle the software for you so that you can focus on business development. 

•  Prepare in Advance

Lastly, it is important to be prepared for the tax season well in advance so that you don’t scramble to meet the deadlines at the last minute. Handing over this task to an offshore accounting firm can help reduce the stress of routine administrative tasks and reduce excess burden on your team.  

•  Capital Gain to Reduce Taxable Income

Accounting firms always need to analyze capital receipt and revenue while bookkeeping financial statements. Capital gain is one of the concepts which applies to investment, yet different from it. A capital gain occurs when an asset is sold for a higher price. The gain from such sales is the unrealized increment in the valuation of the asset during the time asset was held by the entity. 

To calculate tax, the same indexation is used to evaluate the asset’s current value as per the inflation index. Tax policies have changed from time to time, and not all capital gains are charged at the standard rate. 

Apart from that, capital losses can be set off against capital gains to reduce taxable income. Acquiring and disposing of investment with a retirement account does not attract any capital gain tax, irrelevant of state or local tax laws. In the case of a normal account, capital gains can be made tax-free using the Roth IRA accounts if the rules of that account are followed properly.

These are the most effective ways to reduce the tax burden on your accounting firm. It is important to note that outsourcing from a good accounting and tax preparation firm to help implement these tricks is crucial, particularly for growing businesses. CPA tax preparation by these firms can help take the load off your existing accounting team while ensuring that you reap maximum benefits. 

For tax preparation outsourcing, visit CapActix. Contact us at +1 201-778-0509 or reach out at [email protected]