In addition to preparing taxes, a tax planning attorney can help select an entity, business succession, and dissolution issues. In New York City, tax planning attorneys are typically highly qualified and experienced. Many have extensive lecturing and policy-making appointments. In addition to being an exceptional resource for clients, they are well-respected and are members of The American Bar Association’s Tax Section.
CPAs are more knowledgeable in tax preparation
Most state boards of accountancy include SSTS (statement of professional standards for tax preparation) rules as part of their regulatory framework. Tax claims are the most common form of malpractice; following the directions is a practical safeguard against such charges. The AICPA has seven statements. These statements are discussed below. Here are a few key points to keep in mind when preparing a tax return:
CPAs have more education than just taxes. They study various accounting fields, including financial planning, business auditing, budget forecasting, and variance analysis. Their education and training enable them to help clients with more than just their tax returns. A tax accountant is highly knowledgeable in various aspects of accounting and can guide their clients in many different financial matters. For this reason, many people choose to hire a CPA for their tax preparation needs.
Tax planning involves entity selection
When forming a new business or investment venture, choosing the appropriate legal and tax structure is essential. The choice of an entity includes C corporation, S corporation, and partnership. Tax consequences and advantages of each type of entity should be considered. A sole proprietorship, for example, may be better suited for limited liability, while a partnership is more likely to offer protection against personal liability. However, a sole proprietorship may not be the best choice if you plan to grow to a specific size. The choice of the entity must be made considering future business goals, income projections, and expected returns.
A company can have an excellent tax-planning strategy in one year and not the next. For example, in one year, a company may decide to sell a piece of real estate that meets the criteria of ASC 740-10-30-19. Still, that same parcel becomes strategic for the company in a subsequent year as it expands geographically. While these situations are rare, they can occur. Therefore, entity selection is critical to achieving the best possible tax outcomes.
Estate planning involves trusts
To ensure your assets are adequately handled after you die, you need to consider estate planning. Estate planning involves balancing competing interests between family members and distributing assets to the correct beneficiaries. It involves several areas of the law, including business, tax, family, and property. A qualified estate planning attorney can help you choose the right strategy for your circumstances. You may be surprised to learn that a tax planning attorney has extensive experience in these areas.
An estate plan can include establishing revocable trusts to provide for the distribution of assets after your death. Revocable trusts, also called “will substitutes,” are often used to avoid the costly probate process. An estate planning attorney can help you create and fund these trusts. Generally, this type of trust is used for estates with multiple generations and complex problems. In these cases, an attorney will help you set up a trust to make the process as simple as possible.
