Managing the financial aspects of your business is a complex job. This is the reason why business owners tap only the expertise of licensed professionals to handle such matters like accounting, preparing financial statements, or tax accounting. These are integral aspects of your business that can impact the overall operation, as well as your ability to track down progress of the business’ finances. Therefore, it goes without saying that business owners should work only with reputable professionals who have lots of experience and expertise in the field.

Local businesses in Toronto, for instance, will have plenty of choices for income tax accountant within the area. However, the only way to ensure that you have selected the best tax accounting firm in Toronto for the job is through opting for services that specialize in tax accounting. Handling income taxes is one of the more challenging types of accounting services there is. Hence, you need to entrust this responsibility only to those professionals with the right knowledge and tools for the job.

Choosing between large or small tax accounting firms can be your personal choice. However, you should never proceed without evaluating your business’ tax accounting needs. A good start would be to do a comparison of your income tax accounting requirements against the knowledge and experience of a given tax accounting professional or firm.

Have they handled tax accounting services for an individual or a business before? What do previous customers say about the quality of their service/s? These are among the first few questions you need to ask an accounting firm. There are a few accounting professionals who possess extensive knowledge in this field. However, most of them might be used to doing accounting for individuals only and not an entire business enterprise, which will obviously be more complex and demanding. Opting for a firm or accountant that has experience handing both individual and business tax accounting might be a wiser idea.

Asking around with your friends or business associates will not hurt either. Most of them are probably working with a tax accounting firm in Toronto that are reputable and proven to produce quality results. Hence, opting for those will be a safer bet for you as compared to choosing an accounting firm with no proven record as of yet.

Choosing a tax accounting firm for your business is a lot of work. But it will be worth the time and effort you have invested as it will eliminate any headaches in the future, especially when it comes to dealing with your finances and tax obligations.

We are all paying economic taxes and we need to understand the functionalities of all these so we can understand and be able to assess that the prices of items and good that we are buying are priced fairly. For a single, tobacco, candy, nail or any tiny object being sold in the market are all tax inclusive. Taxation in economics is when business establishment transfers wealth, in terms of money, to the government. This wealth is then collected and saved by the government and should be used for the welfare and benefits of the people. The dilemma here now is that what happens when the business establishments manipulate economic taxes?

Economic taxes are subdivided into three. We have the Deadweight cost of Tax, the Pigovian Taxes and the Transparency and simplicity. Let us evaluate how these three runs in the economy and affect your lives.

Deadweight Cost of Tax

Deadweight cost of taxation happens when there is a deadweight loss caused by additional economic burden, thus reducing economic efficiency. The cause of this is monopoly pricing (in the case of artificial scarcity), externalities, taxes or subsidies, and binding price ceilings or floors. Monopoly pricing is when a company dictates a price that is way beyond the required price of a specific item. Giving extra subsidy of a specific item which is not needed can conversely say that the consumer is buying the product more than it benefits them. This only means that either way, the resources here are not properly used.

Pigovian Taxes

Pigovian taxes are used to correct what we call negative externalities and turn this into economic efficiency. This can be associated with any public activity that is being added with tax value which is not covered by a private cost. The market outcome may not be efficient and would lead to over-consumption of the product. This market outcome is then corrected by the Pigovian tax. Examples would be taxes include those on polluting fuels (like petrol), taxes on goods which incur public healthcare costs (such as alcohol or tobacco), and charges for existing ‘free’ public goods (like congestion charging) are another possibility.

Transparency and Simplicity

Transparency and simplicity deals with how tax details affect the tax payment of some companies. When there are too much tax details, there would be opportunities for more legal tax avoidance and illegal tax evasion. Some transactions of companies which are not clearly identified and labelled as non- taxable would be a loss for economic efficiency.

“This is a guest article from Advance Me, America’s leading merchant cash advance provider.”

When it comes to doing taxes, most of us would rather just hand everything over to someone at H&R Block.  Not only do we not understand how our system of taxation really works, but as long as we’re getting money back (or coming out even) instead of paying at the end of the year, we have no interest in learning.  However, you probably don’t realize the many opportunities you’re missing out on to get back some of the money you pay to the government every year.  In point of fact, you may be eligible for an Earned Income Tax Credit (EITC) that you’ve failed to take advantage of.  And with the ongoing recessions producing more layoffs and longer stretches of unemployment, you need to get every dollar you’re due.  So if you’re interested in finding out how to claim an EITC, here are just a few steps you’ll need to take.

First, you need to find out if you’re eligible.  There are several requirements for those seeking to claim an EITC.  First and foremost, you must earn.  It doesn’t matter if you receive wages from a company, a private party, or you’re self-employed.  If you’re not earning any money, you’re not entitled to an EITC.  Further, you must have a valid Social Security number, be between the ages of 25 and 65, and have no foreign income (amongst other things).  But the main thing that would qualify you for this type of credit is low earnings.  The exact amount depends on the size of your household (including a spouse and dependents), but if you feel that you may be within the limits due to your low income, you should check the requirements on irs.gov.  You may be eligible for up to approximately $5,600, which is a sum you certainly don’t want to pass up.

Once you’ve determined your eligibility, it’s time to tackle the hard part: filing.  This means you not only need to fill out the associated paperwork, listing all earnings (wages, salary, tips, disability, etc.) so that you can figure out the amount of the credit.  There are actually two ways to establish what your credit will be.  You could simply send in your paperwork and let the IRS figure it out for you.  Or you can try to calculate it on your own, although this second method will require you to fill out the EIC worksheet provided in one of several tax instruction booklets (including the 1040, 1040A, or 1040EZ).  Of course, if you choose this road, you could always just have your tax preparer handle it for you, but chances are if you qualify for an EITC you probably can’t afford to pay someone to do your taxes.

Now it’s as simple as filing your return.  In truth, doing your taxes is never easy.  And including extra paperwork for additional money back is bound to be even more difficult (since you have to be certain that you dot every I and cross every T).  But if your earnings are low and you can qualify for a better return via EITC, then you should make every effort to take advantage of the opportunity.  It is made to help those who need it.

Breana Orland writes for Purchase Order Financing you can grow your business and pave the way for more.

These days, a lot of people are turning to the freelance arena as a way to make ends meet.  With an ongoing recession firmly entrenched and layoffs and extended unemployment continuing to permeate society, people with skills to offer are selling them to the highest bidder and finding ways to stay contracted throughout the year.  Although this is great for any individual or family just trying to stay afloat during these troubled times, it can cause real problems concerning taxes.  If you’ve never filed as an independent contractor before, you might find a nasty surprise waiting for you come tax time.  You may not have realized that your previous employers paid a portion of your taxes (federal, state, and even social security) in addition to automatically withdrawing your portion from your paycheck.  All of these expenses will now be due all at once, and the number can be astonishingly high.  But there are ways to hang on to the lion’s share of your earnings by cutting back on what you pay.

The first thing you need to know is that there will be no W2 coming your way.  Regardless of how many clients or jobs you take on during the year, you need to keep METICULOUS records of all transactions, including both invoices and actual payments.  You also need to save all receipts related to business expenses.  In fact, it wouldn’t be a bad idea to have a business checking account and/or credit card to keep everything separate from your personal expenses (it will make your taxes a lot easier to calculate).  Now you just have to go through the process to sort everything out.

Some of your clients may send you a 1099 detailing your payments.  Some won’t.  You can’t rely on this.  But you also can’t report less earnings than those appearing on your 1099s as it will result in an audit (which nobody wants).  You therefor need to report as accurately as possible.  You will be doing this with a 1040 Schedule C form, which is fairly similar to the forms you’re already familiar with.  It’s not brain surgery, after all.  You may have wondered how you could earn twice as much as a freelancer, despite the fact that you were doing the same job.  You’re about to find out.

Most of us make payments to the IRS with every paycheck (the portion that is withdrawn before we ever see our earnings).  You now have to pay that amount in one lump sum, plus whatever portion your employer was paying.  So while you might have paid less than 20% throughout the year and gotten a return before, you will now be paying out closer to 30% (or more) of your total earnings for the year, which could be a hefty chunk of change.  Luckily, you do have a couple of options to whittle down this number.

One way to avoid this bloodletting every April is to file quarterly estimated taxes (which means filing and paying four times a year, although it will often result in paying less and certainly save you from that monster payment at year’s end).  But the major saving grace of freelance work is that you can claim an incredible amount of write-offs.  Work from home?  Claim a home office.  Travel frequently?  Expense your car and airline tickets.  You can also claim a work phone, internet, equipment purchases (computer, fax machine, etc.), office supplies, and any other work related expenses (meals, gifts, and even entertainment, in some cases).  You’ll need to keep receipts for everything, in case of an audit, but you’ll be surprised by how much you can lower your payment with these many deductions.

And just a word of advice; consider going to a tax professional.  These people know all the tricks to help you get the best return while simultaneously avoiding an audit.  You may pay a few hundred dollars for their services, but if it saves you thousands it’s well worth the expense (plus, you can write it off!).

Shirley Simpson writes for Totally Money where you can find information on financial products and browse through loans for poor credit to find the card that meets your needs.

Looking for more ways to save on your taxes?  Every year, wage-earners overpay by trillions of dollars (collectively) because they fail to realize the many deductions they’re missing out on.  Here are a few you might not know about that could save you hundreds (or thousands) of dollars this year.

1.  State sales tax.  You know you can deduct what you paid on last year’s taxes from this year, but did you know you can choose to deduct what you paid in sales tax instead?  In general, you’ll get less this way.  But if you purchased a big-ticket item in the last year (car, boat, building materials) you may be able to sub in sales tax and get a better return.

2.  Roth IRA.  If you contribute to an extra retirement fund, the money is considered pre-taxable income, so don’t forget to claim it come tax time.

3.  Small charities.  You’re sure to write off a large donation, like a car or a check contribution, but the little things (like donating clothes, toys, and furniture to the Rescue Mission or Salvation Army) can also pay off.  Just make sure you get a receipt if you want to claim them.

4.  Job-search expenses.  Finally, the recession pays off!  If you spent money in search of a job last year (driving, hotels, printing, related fees), you can list it as a deduction.  The restrictions are that it can’t be your first job and your deductions have to total more than 2% of your adjusted gross income (if you’re not working, this shouldn’t be too difficult).

5.  Estate tax on an IRA.  If you received an inheritance in 2010 that included an IRA and you had to pay estate tax on it, you can deduct that amount from your taxes, which is especially helpful if you get bumped into the next tax bracket.

6.  Jury pay.  If you’re lucky enough to have an employer that continues to pay your salary while you’re engaged in jury duty, you are required to turn over your jury pay as recompense when you receive it.  However, you still pay income tax on it, so be sure to write it off.

7.   American Opportunity Credit.  This has replaced the Hope credit for those attending college, and it gives you even more benefits (applies to up to $2,500 in tuition and related expenses for individuals earning less than $80,000/year and couples earning less than $160,000).

8.  Energy-saving home improvements.  You can always claim home improvements, but if you include some environmentally-friendly renovations, you may be able to double dip.  The credit applies to up to 30% of expenses (up to $1,500) for the following items: biomass fuel stove, high efficiency furnace, central air, or water heater, and energy-saving windows and doors.

9.  Head of household.  If you recently became single and you have a dependent living with you, claiming your status as “head of household” instead of “single” may offer you additional savings on your taxes.  Same goes for “surviving spouse” (within 2 years of loss).

10. Dependent parents.  If you care for your parents and pay more than half of their living expenses, you can claim them as dependents (just like children).  If you split costs with siblings so that all of you contribute more than half of your parents’ living expenses, then you will have to work out an arrangement to decide who claims them as dependents each year.

Leon Harris writes for AdvanceMe, the nation’s leading business cash advance provider.