Just as there is a big difference between tax fraud, tax avoidance, and tax evasion, there is a distinction between tax planning and tax preparation. Unfortunately, many individuals mistake tax planning with tax preparing and use the terms interchangeably. Although both are very important, they’re two totally different things. Tax Planning is a long-term year-round activity while tax preparation gets the filing done.
What is Tax Preparation?Tax Preparing is basically the process of compiling, preparing, and filing tax forms. This requires individuals to meet with their tax accountant during the tax season. Tax preparation deals with past income and numbers that must be reported on the income tax return. The client provides the required information and the preparer records and tallies up those numbers to determine whether or not you owe money or receive a refund.
What is Tax Planning?On the other hand, tax planning is more long term and evaluates the impact of life events on your tax situation. It’s a year-round activity and requires a higher level of engagement between the taxpayer and tax team. Effective tax planning can help you minimize future tax liabilities, especially going into retirement. The earlier you start the better when it comes to tax planning.
Here are the most common life events triggering a tax plan review. Keep in mind though, that many other events big and small have the potential of impacting your tax basis over the long-term…
* New Pension or IRA distributions* Significant Changes in Income or Deductions* Job Changes* Marriage, Divorce or Separation* Attaining Age 59 1/2 or 72 (RMDs)* Sale or Purchase of a Business* Sale or Purchase of Any Real Estate* Retirement* Notices from IRS or State Revenue Departments* Self-Employment* Charitable Contributions of Property over $5,000
You should always make sure that tax planning is a part of your tax process. Tax preparation gets the filing done while tax planning enhances tax efficiencies which create a better tomorrow.
Our "On Call" tax service offers year round virtual tax preparation to individuals who have registered for that service. Your preparation team is led by an Enrolled Agent with the Internal Revenue Service. Every return is reviewed with the taxpayer prior to submission. Each may interact with the Enrolled Agent team at any time, even post tax season. Records are securely maintained. Our price also includes a complimentary tax planning assessment, discussed during the Enrolled Agent review. We offer a discounted price of... $99.00 for eFilers, which includes your federal, your resident state and your local (where applicable). Additional states or forms related to more complex situations are $30.00 each.
Abacus also provides tax services for individuals who are not able to file electronically. These special situations include, but are not limited to the following… past due filers (prior year), amendments to previous returns and ITIN assistance to foreign nationals. These special situations require no retainers or deposits and are billed at our normal hourly rate of $80.00 per hour. Your assigned Enrolled Agent will review the cost estimate prior to any services being performed.
We proactively manage your personal tax issues including how upcoming events may impact your tax status and vice versa. Not all tax related issues are readily apparent. We understand the latest federal, state and local tax legislation and how new developments may affect you going forward.
**Circular 230 Service Disclosure**Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained on this page is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Nothing will be added or deleted during the preparation of a return that would understate your tax liability.