The general rules of tax accounting are used in determining whether an accounting method conforms with generally accepted accounting principles (GAAP). These general rules include the recognition and measurement of assets, liabilities, income, expenses and tax receivable, as well as preparation of financial statements.
There are two types of taxes, namely income and payroll taxes. The first type of tax is more general in nature and comprises tax on wages, salaries, commissions, etc. The second type of tax covers certain activities like stock trading, gambling, etc. That is, it is the type of tax which is paid either through a payroll or income tax system. Each type of tax has its own rules and regulations.
Tax collections usually take time because of the various paper works. This is why tax preparation is an important part of accounting procedures. Tax preparation involves preparation and recording of financial transactions and data and submission of the tax returns to the Internal Revenue Service. It can either be done by a private firm, government agency, or a taxpayer himself.
Tax planning and accounting involve the management of tax liabilities and their resolution. Tax planning involves the planning of future tax payments, and the accounting of past tax payments. Tax planning involves estimating future tax liability based on the present income and expenditures of an individual, business or company. Tax planning helps prepare and organize financial forecasts that will help determine future tax liabilities of a particular entity.
Tax planning and accounting can be broadly classified into two categories, namely business and personal tax planning. Business planning involves preparing the business tax returns. On the other hand, personal tax planning involves preparing and managing the personal tax returns. Tax planning and accounting help prepare tax returns that will be submitted to the Internal Revenue Service. for filing purposes.
The accounting and preparation of a personal tax return may be a complicated process. It may involve the assessment and review of financial documents of an individual, business or company. It may also involve the review of tax laws and rules and regulations of state, national, and local levels. In tax planning and accounting, tax returns and financial records are prepared and submitted to the Internal Revenue Service for submission for tax reporting purposes. Tax planning and accounting involve all types of financial and tax matters such as preparation of federal and state income tax returns, filing of federal and state income tax returns, analysis of financial data and preparing the return(s) for the state and local level tax authorities, collection and disbursement of state and local tax revenues, among others. Tax planning and accounting involve all aspects of tax and financial reporting, including preparation of the returns, collection of federal income tax and state income tax, reporting the income and tax returns to tax authorities, preparation of payment instructions, collection and payment of state and local tax revenues, among others.
Tax planning and accounting involve preparing financial statements for analysis purposes and preparing financial reports required for federal and state tax administration, and preparation of tax schedules, among others. It involves preparation of financial statements to assist the Internal Revenue Service in determining the appropriate balance of taxation for a particular taxpayer. Tax planning and accounting are important to any organization. Thus, it is a vital function in any organization.