Professional accounting qualifications include the Chartered Accountant designations and other qualifications including certificates and diplomas. In Scotland, chartered accountants of ICAS undergo Continuous Professional Development and abide by the ICAS code of ethics. In England and Wales, chartered accountants of the ICAEW undergo annual training, and are bound by the ICAEW's code of ethics and subject to its disciplinary procedures.
Two different tax credits give those paying educational costs some relief. The American Opportunity tax credit pays 100% of eligible tuition and required fees up to $2,000, and another 25% of the next $2,000, making for a total maximum credit of $2,500 per year. It's available for four years of undergraduate education, and taxpayers can claim the full credit if they make up to $80,000 for singles or $160,000 for joint filers. Reduced amounts are available for incomes up to $90,000 for singles or $180,000 for joint filers.
Tax credits are extremely valuable breaks for taxpayers. Credits lead to a greater reduction in tax than deductions because they are directly applied to your tax bill in a dollar-for-dollar manner. For instance, a $1,000 credit would cut your tax bill by $1,000, but a $1,000 deduction would reduce your taxes by less than $1,000 -- more specifically, typically somewhere between $100 and $370 under current tax law. In particular, the following tax credits are among the most common and can produce significant savings.
The cost principle states that assets must be recorded on the date they are acquired, and at the amount for which they were acquired (regardless of whether they change in value over time). For example, the hospital records the value of the purchased medical equipment at the precise value it paid for them on May 1, despite the fact that such equipment depreciates over time.
Tax planning is the analysis of a financial situation or plan from a tax perspective. The purpose of tax planning is to ensure tax efficiency. Through tax planning, all elements of the financial plan work together in the most tax-efficient manner possible. Tax planning is an essential part of an individual investor's financial plan. Reduction of tax liability and maximizing the ability to contribute to retirement plans are crucial for success.
The word "accountant" is derived from the French word compter, which is also derived from the Italian and Latin word computare. The word was formerly written in English as "accomptant", but in process of time the word, which was always pronounced by dropping the "p", became gradually changed both in pronunciation and in orthography to its present form.
To take advantage of these lower rates, taxpayers should ensure that they meet the requirements for qualified dividend income and long-term capital gains. Most dividends that U.S. stocks pay qualifies, but any dividends that don't qualify get taxed at higher ordinary income tax rates. Selling an investment you've held for a year or less makes any gain short-term rather than long-term, and short-term capital gains also get taxed at ordinary tax rates. If you pick good dividend stocks and hold your investments for the long run, the tax laws reward you with lower rates.
Hiring a certified public accountant (CPA) could be a better option instead of doing your taxes by yourself, but it depends on your tax situation and preferences. Having a CPA do your taxes is usually recommended if you have a business or any type of side job, or if you’ve been contacted by the IRS for a tax-related matter. Others who can benefit are those who own rental properties or have many assets. You can also hire a CPA if you need help understanding what deductions or credit you might qualify for.