Individual Tax Preparation for Houston Businesses
Individual tax preparation services help individual tax filers ensure their tax returns and documents are properly completed and delivered to the IRS on time. In addition, an expert tax preparation service can also:
- Gather important tax documents for tax filing purposes
- Review deductions and expenses
- Identify potential tax credits, deductions and other advantageous tax positions
- File state and local tax returns
- Assist self-employed individuals with their unique tax provisions
- Track changes in tax law and apply them to their clients’ tax planning
Although individual tax preparation is a comparatively simple service for an experienced tax accountant, it’s typically combined with additional tax services that an expert can provide. Tax planning and IRS audit preparedness are two examples.
What Do Individual Tax Preparation Services Include?
A tax accountant or CPA can provide an array of individual tax preparation services that include:
- Federal, state and local tax filing – The core of any tax preparation service is the tax preparation itself. Depending on where the taxpayer lives or does business, they may have state and local tax obligations to consider, as well. A tax preparation service will identify the necessary tax forms for their client and ensure they are accurately completed and filed on time.
- Gathering and reviewing financial documentation – CPAs frequently work with clients who have incomplete or missing financial information. Experienced tax preparation services can review the documents that are available and use them to complete their client’s tax picture. This could include W-2s, 1099s, invoices, receipts, medical expenses, brokerage accounts, retirement accounts, charitable donations and more.
- Reviewing tax deductions and tax credits – Tax preparation services may include some basic tax planning and optimization, such as reviewing the taxpayer’s tax situations to determine which deductions and credits they may qualify for.
Common examples include the Child Tax Credit, the Child and Dependent Care Credit, the American Opportunity Credit, the Earned Income Credit, as well as credits or deductions for adoption expenses, student loan interest, medical expenses, mortgage interest or IRA account contributions.
Every taxpayer’s situation is different, so tax experts will need to take a close look at their client’s finances before identifying the best mix of tax deductions and credits. Some tax preparation services can do this, though many also provide in-depth tax planning as a separate service. - Assisting self-employed individual taxpayers – Self-employed taxpayers have additional tax provisions to consider when filing. For example, self-employed individuals will need to accurately categorize and track business expenses – office expenses, vehicle expenses, travel expenses, marketing, insurance, utilities, professional services, maintenance and depreciation are all examples.
Self-employed taxpayers are also required to make quarterly tax payments to avoid underpayment penalties. Self-employment taxes include what is typically the employer’s share of Social Security and Medicare taxes.
In short, self-employed individuals have complex tax situations to consider when preparing taxes. An expert CPA can simplify it for their self-employed clients and ensure they meet their unique tax obligations. - Tracking changes in the tax code – The Internal Revenue Code is an active document that changes every tax year. Some of these changes can have major implications for an individual’s tax situation.
For example, in 2024 several inflation adjustments are expected, including adjustments to tax brackets and the standard deduction. The outcome of the 2024 election will also have outsized influence on tax law changes, as the Child Tax Credit and capital gains taxes are political matters.
A reputable tax accountant is aware of any and all updates to tax laws and will keep these changes in mind when preparing taxes for individuals.
A Tax Preparation Expert Can Also Provide Tax Planning Services
Tax preparation and tax planning are often mistaken for each other, but they are separate services that play different roles for an individual taxpayer. Whereas tax preparation services are focused on the present tax year, tax planning takes a long-range view of a client’s tax situation. Here is why taxpayers frequently combine the two tax services:
- To minimize future tax obligations – Tax preparation ensures a taxpayer meets their current tax obligations. Tax planning helps individuals control their future tax obligations through smart use of deductions, retirement accounts, investment tools and other strategies.
- To support long-term financial goals – Tax preparation services protect a taxpayer’s financial future by preventing costly penalties or other unwelcome tax surprises. Tax planning services protect a taxpayer’s financial future by ensuring they don’t pay more than they need to. By taking a long-range view (multiple years into the future), a tax planning expert will help the taxpayer know what to expect when planning for the future.
- To provide total peace of mind – Tax preparation services give taxpayers present peace of mind knowing that their taxes will be properly prepared and filed on time. Tax planning services provide ongoing peace of mind by outlining an individual’s tax strategy and providing a clear course of action.
Work with a Reputable CPA for Individual Tax Preparation Services
Tax preparation services provide certainty to individuals during one of the most uncertain times of the year – tax season. With a CPA or tax accountant such as Evident Pros overseeing your tax preparation, you’ll know that your taxes will be filed accurately and on time.
