Pronto Tax School

Month: March 2013

How Do I Avoid an IRS Audit?

How Do I Avoid an IRS Audit?

By Tim Frye

There are some things in life that you simply can go without experiencing. Compound fractures, deep knife wounds, the expiration of loved ones. Oh, and IRS audits would probably sit top on that list for the majority of people, unless you are a sadist and enjoy excrutiating pain. The IRS audit, or “examination” as they have now reclassified it, is about as painful as getting a gangrenous appendix ripped from your insides without the benefit of anesthesia. So, in an effort to save your client from this horrific ordeal, Pronto Education would like to offer a few tidbits of advice as to how to assist the taxpayer in the avoidance of this treachery.

What is the Child Tax Credit?

What is the Child Tax Credit?

By Tim Frye

Children are the future. And I am sure that your children are the most precious in the entire world. They are priceless. Well, actually, to the IRS they are actually worth a specific amount, depending on their age and there living situation. There can be several different benefits in claiming dependents on a tax return, especially if they are your client’s own children. There is the Earned Income Credit, which is dolled out in greater proportions if the taxpayer has qualifying dependents. They will get the extra $3,800 for the dependent’s personal exemption, which can be an especially potent deduction if your client is resting in high marginal tax brackets. Then there is the Child Tax Credit. The Child Tax Credit is a credit that is offered to those taxpayers who have dependents that are under the age of 17 by the end of the tax year, and it can eat away at tax liability up to $1,000 per child, depending on the taxpayers earned income totals. Let’s discuss the specifics of the Child Tax Credit, and it’s refundable portion, the Additional Child Tax Credit…

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Deduction vs Credit?

Deduction vs Credit?

By Tim Frye

When it comes to taxes, most people cringe at the thought of trying to comprehend even it’s most miniscule aspects. Accountants get paid hefty fees an hour because of this fact. The tax code currently finishes off at an excess of 70,000 pages, so it’s no wonder people want nothing to do with it. Our job at Pronto Education is to aid you, the tax preparer, in transposing these intricacies into a tangible, understandable, and clear format. The true foundation of taxation is the usage of deductions and credits to reduce taxable income. It is important for you to be able to designate and elaborate on the difference between a deduction and a credit. Let us jump head first into the tax pool and test the waters…

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What are the most missed Itemized Deductions?

What are the most missed Itemized Deductions?

By Tim Frye

As a tax preparer there are sometimes few and very limited ways that you can truly make a difference for your client. On many occasions when you are preparing a return, the overall situation is clear and relatively simple. The taxpayer has a short form, single standard deduction, and not much else going on. So at this point your service will basically consist of entering the taxpayer’s information correctly. As you can see, there is not much room for you to show off your tax preparation talents. The one way you could change this situation and widen the gap between you and the other preparers out there is to find the taxpayer some itemized deductions that another guy may have missed. Doing this could help them save some extra dough. Lets look at the often over-looked itemized deductions that may be able to get your client over the standard deduction hump, and help you prove your tax preparer pedigree.

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Best Credits Available to Taxpayers

Best Credits Available to Taxpayers

By Tim Frye

Everybody wants a little credit. When you work hard, you want it from your wife. When your son hits a jumper, he wants it from you. When you wife finally cooks up a decent meal, she wants it from you. Well, the tax game is no different. When your client is settling up with the IRS, they want their. Credits can be an extremely powerful antidote to taxation, because they can eat away at tax liability dime for dime, and can even give money back once the taxpayer’s liability reaches zero, if the credit is considered refundable. Lets go through the top credits and their benefits, and give an additional layer of knowledge to drop on your client.

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