Tax Accountant: Advantages for You
Kass & Kass CPA PC

A tax accountant is more than a preparer. A tax accountant goes beyond return preparation and reviews prior year returns, asks questions, and suggests ways to reduce tax bills to improve you financial security.

Tax accountants use three major tools to reduce your tax bill. The first tool is tax credits.

A tax accountant can reduce your income tax dollar for dollar by helping you to qualify for allowable tax credits. Examples of some of these tax credits are the child tax credit, child care tax credit, tuition credits, and credits for installation of a residential solar energy electric generating system.

A tax accountant’s second major tool is tax deductions. A tax deduction such as making a contribution to a tax deductible Individual Retirement Account (IRA) saves an amount of income tax equal to the amount of the deduction times your tax bracket percentage. If a single taxpayer in the twenty five percent tax bracket made a $4,000.00 contribution to a tax deductible IRA, this results in a tax saving to him of $1,000.00.

A good tax accountant can also save you tax dollars by suggesting you switch your income earning assets into investments that are tax favored. A simple example is if a single taxpayer in the 25% bracket earns $2,000.00 of interest income a year from a certificate of deposit at the Dime Savings Bank then by switching one half of the amount in that account to municipal bonds which are completely tax exempt this taxpayer can save $250.00 per year ($1,000 interest x .25% = $250.00).

A good tax accountant can also save you tax dollars by forecasting your income taxes for the current year and making sure you have essentially paid in or had that amount withheld from your salary or pension distribution for the current year. State income taxes paid out prior to December 31st are deductible for taxpayers who itemize their deductions in the year paid.

Good tax accountants also know that deductions that reduce your adjusted gross income are particularly valuable. A reduction in adjusted gross income will cause more of your itemized deductions such as medical expenses and miscellaneous itemized deductions to be deductible. A good tax accountant will also strive to reduce the effects of the alternative minimum tax (AMT) if it applies to you by having you recognize as much income as possible in the current year and postponing deductions until the next year.

Good tax accountants help you to take all allowable deductions and credits for which you or your business is eligible and understands the income tax relationship between your business income and the income tax you will have to pay.

A good tax accountant proactively helps you reduce your income tax burden, improving your financial position and does much more than merely preparing your income tax returns for filing.

Please contact Kass & Kass to schedule a consultation. A brief introductory consultation is available for a nominal charge.