Taxation is an exceptional area in a business or organization where there should be no room for errors. Taxation errors can be very costly because they attract penalties, interests, or even extra tax. Lack of proper record-keeping practices can result in an audit, which is a more expensive and tedious exercise as it involves gathering records and preparations.
Finding a tax attorney is necessary if you are to understand what the Internal Revenue Service involves and state tax obligations. Let’s look at some of the reasons why a business should hire a tax attorney.
Businesses can generate income in several ways. The IRS is all about gross income, which may be derived from goods, property, sales, services, and bartering. You have to be well-informed about what is considered as gross income by IRS because omission of something which falls under the category will attract penalties, additional taxes as well as interest. By hiring a tax attorney, you will get to learn what falls under the gross income, and he/she can further explain to you the roles you need to play when it comes to income reporting.
It’s a responsibility for every business to meet the tax obligations, whether it has employees or not. For instance, a business with no employees is required to file tax returns for a self-employed individual, which may comprise of quarterly approximated tax payments. As per the law, sole proprietors are not expected to pay business taxes, but they are considered as both employers and employees, and the tax implications can be very tricky for this dual role.
One of the motivations behind starting a business is the availability of business deductions to balance out the income. On the other hand, you have to know what they are and what are the requirements to use them, if you are to take advantage of such deductions. You can approach a tax attorney at dallolawgroup.com for advice if you intend to optimize your deductions.
In the field of business, there is something called tax years. A business can set its tax year at times, but there are times when the government sets the tax years for businesses. Approaching an attorney in such a scenario is very crucial since he or she can guide you to choose the most appropriate tax year. He/she can help you to abide by government requirements as long as your business tax year is concerned.
The discussed above are some of the reasons why, as a business owner, you might need the services of a tax attorney.