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Why Do You Need A Tax Consultant?

Every person who earns an income which is taxable needs to understand his or her tax liabilities and how much tax he owes to the government. Similarly, the businesses and companies or corporations also have to assess their tax liabilities so that there are no problems in paying those taxes. However, sometimes it is not possible for you to keep your accounts properly due to complex nature of investments and income sources. So it is always better to hire a professional who can tell you exactly how much tax you need to pay. If you are a businessman or an owner of a company, then hiring a tax consulting agency will be the best option for them.

Reasons to hire a tax consultant

  • You need not go through the complex tax laws to ascertain your tax liability. As these laws change frequently, you may not be able to keep up with the changes and it can cost you a lot in penalties if you pay less tax.
  • If you hire a tax consultant, he can answer all your tax related queries so that you have a clear understanding of the tax laws and your liability.
  • The tax consultant can also help you in saving taxes as he or she can inform you about various tax saving schemes and techniques.
  • You will be able to save your valuable time as you will definitely take more time to determine your tax liability than the time taken by a professional.
  • It will also save you money in taxes as the tax consultant can give you a complete list of tax deductions available to you, which you may not be aware of. This will definitely save you money, even if you count the fees charged by the tax consultant.

However, before hiring a tax consultant or tax consulting agency, it is always better to take some precautions because hiring a tax consultant who is not expert in this field or not knowledgeable enough can cost you a lot of money. Therefore, you can make use of following tips when you are thinking of hiring a tax consultant.

Precautions to be taken while hiring a tax consultant

  • You have to make sure that the tax consultant understands your business and your requirements so that he is able to provide you better service.
  • The tax consultant should be able to provide assistance in tax matters any time you require it and not only in the tax season.
  • Ensure that your work is not outsourced to someone else by your tax consultant as it can be complicated and time-consuming for you to contact the third party if you have tax related problem.
  • You should also inquire about their charges and the system of charging i.e. whether the consultant charges you a fixed amount for the complete tax related work or him or her charges you per hour of work. This way you will be able to decide which way you prefer.
  • You should also make sure that the people who are working at the tax consultant’s office, who may work on your tax liability are also trained to do this particular job.

 

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What Are The Objectives And Purpose of Accounting?

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Accounting simply means keeping accounts of finances of a company or even a family. When one keeps an account of income and expenditure and also keeps a track of tax liability, the whole process can be called as accounting. This is a very simple definition of an accounting and is it concerns a household account, then this process is enough. However, in the case of a corporation, whether it is a private corporation or a corporation managed by the government, the process is very complicated and different. The accountant of such companies cannot just create a simple financial statement which shows income, expenditure and profits of that company.

Purpose of accounting

If we want to know the purpose of accounting as an important process, then it can be summed up as knowing the financial position of a person, household or a corporation. Keeping clear accounts helps every company or business to keep track of performances in past and present. This means that the financial performance of a company is recorded so that the future decisions can be made based on this information.The purpose of the process of accounting is to keep a record of every financial transaction made by the corporation or company.

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Objectives of Accounting

  • The main objective of accounting is keeping a systematic record of each and every transaction which involve monetary exchange.
  • To maintain the records of amounts to be received and amounts to be paid to the other parties like suppliers, transport companies and most importantly the employees of the company.
  • To maintain a balance sheet at the end of a regular interval which will show the financial position of the company including its liabilities and assets.
  • To help ascertain whether the business is financially strong or not so that proper decisions can be taken by the company.
  • To be able to give the financial information to the other parties like shareholders, business associates or financial institutions providing financial assistance etc.
  • To give the complete picture of the financial condition of the company so that the owner of the company can make an informed decision.income-tax-491626_1920

Accounting is an integral part of our day to day life when we keep a record of our daily expenses and at the end of the month we tally the income and the expenses to see whether we are within our budget or not.Similarly, the accountants follow the same process to determine the financial behavior of a company to see whether they are financially strong or not. Although the principles of accounting are same, the companies and corporations have to follow a different set of rules when finances are concerned and therefore the accounting process for them is different and more complicated. Therefore, the accounting of the corporations is handled by trained accountants or accounting firms so that they can do a detailed and clear job of keeping accounts of the company. These accountants have to follow the Generally Accepted Accountancy Principles to maintain the accounts of such companies so that they are aware of their tax liability and their financial position.


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What Are The Types Of Accounting?

As you, all must be aware that accounting is a very important aspect of any business or company. Not only businesses, but even households require accounting so that they are aware of their financial needs and sources. Accounting is nothing but keeping a record of all your financial transactions and then summarizing it so that you can get all the information at a single glance. It is very important for any business as it gives an idea about the financial position of a company and whether it is in profit or it is suffering a loss.

It is a process which can be handled by a common man if it is limited to the finances of a household where only family’s income and expenditure is concerned. However, when the accounts of a corporation or a business are concerned, you need someone who is trained in accounting to handle them. The reason behind this is that the accounts of a corporation or a business are different than that of a household account and therefore they need to be recorded and summarized in a particular manner so that the tax, profit, loss etc. can be calculated without any problem.

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There are different types of accounts and there are different rules as to how to maintain these different accounts.

Types of accounting

  • Tax accounting

Tax accounting in simple words can be explained as the accounts maintained for the purpose of deciding the tax liability of any company or business.Generally, the accounts of any company or business are maintained based on the principles of financial management, but to due to different taxation laws, it becomes necessary to keep separate accounts based on tax laws so that the corporation can plan ahead for the taxes owed by them in a financial year.

  • Financial Accounting

Financial accounting of a company means keeping a record of the financial position of a corporation based on the basic principles of accounting. Financial statements are prepared so that the information about income and expenditure of a company is available easily. It is important that these financial statements are prepared by following the standard rules of accounting which are practiced by every company and corporation in the world.

  • Forensic accounting

Forensic accounting means the preparation and checking of accounts of a company or business where there are charges of embezzlement or fraud. In such cases, special accountants are hired to investigate the discrepancies in the accounts of that company. These accountants are called as forensic accountants and they can be called for giving evidence in the court of law.

 If the accounts are clearly recorded, then the businessman will have an idea as to what is his income in a given financial year, what are his expenditures and what is the amount of profit he earned. This will help him in calculating how much tax he owes to the government. Not only this, but such record can also help him to cut down on unnecessary expenses so that his business is earning more profit.…