Understanding The Need For Income Tax Self-Assessment

Did you know that approximately one in three taxpayers is affected by self-assessment? This system gives you greater control and responsibility over your tax affairs. Under this condition, there is a common date for the payment of tax and filing of Tax Returns, which usually falls in the last day of October.

This system, which is known as ‘Pay and File’ actually allows taxpayers to file their return and pay the balance of tax outstanding for the previous year at the same time. In case you are one of these people, there is no need to be concerned as long as you keep detailed financial records and meet the deadlines. On the other hand, there are still some who do not understand the need for this process.

This is the reason why, more and more people receive fines for failing to meet the deadline often because they find the filing system unnecessarily long and confusing. Tax returns vary in length as they are customized to each individual’s circumstances. It is usually a six-page paper or online tax return, which covers your income from savings and investments, pensions, tax allowances and reliefs, as well as state benefits.

All you have to do is to complete the supplementary pages or online sections checking only the types of income that applies to you. Therefore, it is highly advisable for anyone to maintain an organized record of income and expenditure to support all amounts claimed on your tax return. If you fail to do so, you will be fined up to £3,000. As I said, there are two ways to submit your self-assessment tax return – through online filing or by paper.

Between these two filing system, the most favorable is online filing. It is because it can help you avoid the possibility of paying any form of penalty or fines to the HM Revenue and Customs (HMRC) due to late submission of tax return. You can either use the free HMRC Self-Assessment service or commercial software. Whichever you may decide to use, you will need to register first to get your Unique Taxpayer Reference (UTR) number.

Once you are already registered, the software will then tailor the return to your own personal circumstances based on your answers to a few simple questions stated therein. Thus, you should only answer the portions that are relevant to you. In case you want to avoid the hassle of getting this job done, then why don’t you get some professional help online from a tax return advisor to assist you in all your needs?

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Steps To Be Considered In Regards To Taxation When Moving To Canada

If you are immigrating to or emigrating from Canada, there are complex tax rules that you will need to consider before and after you move. Considering tax rules related to moving including some planning opportunities will make your move as tax efficient as possible.


Ceasing Canadian Residence:


Take steps to cease Canadian residency if you are moving abroad permanently or for an extended period. When you are leaving Canada avoid keeping any ties with Canada such as maintaining home, club memberships, credit cards, medical plans and spouse or dependants remain in Canada. And when you come to visit, should not spend more than 183 days in a year, it will make consider you to resident in Canada and your income will be taxable.


Canadian departure tax


Beware of Canadian Departure tax on emigration. On departure, you will deem to have sold most of your assets in fair market value except taxable Canadian property. And for other property CRA will allow you to defer paying the tax on gains as long as you post acceptable security and in case of private company shares the CRA will act as any other commercial lender to ensure that the shares retain their value. You will not have to post security for departure tax on the first $100,000 of capital gains.


Capital gains exemption on emigration


If you have farm, fishing property you should crystallize your gains before you emigrate, you will be no longer eligible for the capital gain exemption of $750,000.


Reporting rules for emigrants with property worth over $25,000


If you own a property more than $25,000 you are required to file an information Form (T1161) listing all your significant assets ( excludes cash, RRSP, RESP, TFSA, items for personal use like car, clothes) with your final Canadian tax return in the year of emigration.


If you rent or sell your Canadian home after emigration


If you rent your property, the tenant should remit 25% of your gross rental income as non resident withhold tax.  And if you have any expenses to earn the income you can submit Form NR6.


If you sell the residence you must notify CRA and obtain a clearance certificate. Generally, there is no Canadian income tax levied on the gain from selling the principal residence. However, if you sell more than one year after the year of your move, only a portion of the gain would be exempt.


If you have RRSPs or RESPs


For RRSP you can continue to contribute as long as you have contribution room available. If you withdrew any funds from RRSP you should repay the entire amount within 60 days, if you failed to do so the unpaid balance will be added to your income on your Canadian income tax return for the year of departure.


But in the case of RESP you cannot make any contributions after you become non-resident. And if the beneficiary is a non resident of Canada when withdrawals are made from an RESP any CESGs paid to the plan must be repaid to the federal government.

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Find The Best Accounting Solutions

Business management and administration is one of the integral parts for any business. Keeping track of your finances is one of the major aspects which every business owner must pay attention to. That’s where every business has the accounts department to keep and maintain all the monitory information.

Accountancy is the process of sharing financial information of a business setup with all the people related to that particular business entity. These people are mostly the share holders, managers, business partner, etc. This information is made public with financial statements which are relevant and understandable to the users.

The act of sharing such information, or Accounting, has been in practice since ancient times now. The earliest existence or the oldest account records were found which was considered to be older than 7000 years. These records were found in Mesopotamia. People of that time used to us accounting methods to keep the record of corps and herds.

Since those times, Accounting has evolved and has become the most indispensible part of any business and any organization’s structure.

There are two major parts of Accounting; Bookkeeping and Auditing. Bookkeeping is the process of keeping or maintaining all the financial record in a manner so that it can be used for future references as well. These transactions can be for sale, purchase, income and any payment related to individual or any company.

Bookkeeping is a process performed by a bookkeeper and it must not be confused by accountancy. Both of them are two different processes which are performed by specialized professionals from two expert streams.

Auditing, in general terms, means evaluation of a person, company, process or a project. Auditing is a specialized activity and is performed by trained accounting professionals. In Accountancy, auditing is performed to check the reliability and validity of the information. These services are used to evaluate a business or financial of any organization as well.

Companies use such information before filing for any tender and before collaborating with any company. In Europe, most companies outsource the Accountancy process and London being the hub of UK, has most of the Accounting professionals and financial service providers situation.

Accounting firms in London are professional and experienced in whatever services you may need in Accounting and Bookkeeping.  You’ll find good Chartered Accountants in London who can provide specialized services in this sector.

Outsourcing the accounting services comes with so many benefits as it eliminated the need of hiring professionals in house and you also get the value of money by getting this work done by the third part service providers. It is also very easy to find Bookkeeping services in London as most of the accounting firms also provide bookkeeping services so that clients do not have to get the work done from different vendors or service providers.

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Prove Your Innocence, Get Income Tax Relief

Two-year rule for equitable relief is scrapped. Read on to know what it means and how it benefits you: the innocent spouse.

An “innocent taxpayer” is a taxpayer who had no knowledge of his spouse understating or underpaying income tax liability.

What Does the Change Mean
What happens in practice is that by the time one spouse comes to know about the actual tax collection, the time for equitable relief has expired. To plug the loophole, the IRS, in a burst of common sense, has scrapped the two-year rule for equitable relief. When your spouse underpays or understates his or her income tax liability, you are not held responsible, if you prove your innocence as stated by the IRS.

The revenue and tax authority has changed the law to relieve the innocent spouse of accountability for joint tax liability. The change, effective immediately, lifts the two-year limit for certain provisions of innocent spouse relief request. The change applies to future claims and to claims rejected in the past. However, as Robert W. Wood, the tax lawyer, says on Forbes blog, “The two-year rule for innocent spouse claims under other provisions continues to apply.” And also, he continues, “If your equitable relief request was previously denied just because of the two-year limit, you can reapply as long as the tax statute of limitations is still open.”

The Guilty Spouse Targeted
If you don’t know or have no reason to know the happenings on tax front, you are out of the red; the IRS now hunts for those who are truly responsible.

The dailyfinance.com quotes Paul Talbert, a partner at the matrimonial law firm Chemtob Mass Forman & Talbert, as saying: “Often one spouse has little to no understanding of the family’s finances. Often she or he has no reason to know about tax fraud until divorce is started or he or she is in lawyer’s office reviewing financial documents. This change in the law allows the IRS to go after the people truly responsible for the fraud and spares the innocent victims.” Another benefit is if your request for equitable relief was previously denied due to two-year limit, you can reapply for the same. You will have to see to it that, as mvolaw.com writes, “the collection statute of limitations for tax years has not expired.”

Proving your innocence of your spouse’s income tax status is the prerequisite for getting tax relief. Washington Post’s Michelle Singletary says on this, “You have to establish that at the time you signed the joint return, you did not know, and had no reason to know, that there was an understatement of tax.”

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Tax Sale For A Deed

Having your home lost because you lack funds is probably not a thought you like to entertain. When other people have lost their home though, it could be advantageous for you. A tax sale can provide the opportunity for you to purchase the deed to a home at low costs, and in turn either fix it up for yourself and family or sell it at a higher cost.

Perhaps you have driven past the large sign in front of the dilapidated house down the road every day. You saw that it was announcing a tax sale for a deed, and you did not really know what to think. The day of the sale came and went. Then you were in the grocery store and happened to run into a neighbor. The neighbor was telling you that they bought that house for the low price of $8,000. You could not believe it. You knew it had some work that needed to be done, but you also knew it was worth more than that. The neighbor bought it so that he could sell it for $50,000 and make a profit. Now you knew to ask around next time a house came up for a tax sale.

Of course it really depends on the house, location, and who is at the sale whether you would be able to even get a house let alone at such a low cost. If you ever do have the opportunity, it could be a great one. If you are a contractor or just enjoy fixing up old homes, it could be the perfect chance to put your talents to use on an older home that you bought at a low cost. Buying at a low cost will give you the room to spend quite a bit on fixing it up enabling you to sell it for a good price as well.

If you are interested in finding this type of property to fix and resell, you should make it a priority to begin searching for one in your area. One necessity if you are hoping to do this is having some money set aside so that you can buy it even at a fairly low price. Then you will need the money or have the capability to get a loan to fix up the home knowing that you will be able to pay off the loan fairly quickly. You can begin searching on the Internet to see if you can find listings that mention a tax sale in your area that will fit what you want.

You searched online, but perhaps a few months after talking to your neighbor you see another home with a tax sale sign in front of it. This time you call the number on the sign as soon as you get home to find out more information on the property as well as set up a time to go through the home. When you go through the home, you see it is an older home with great potential. You go for it, and you do not regret it.

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How To Tell When You Need A Tax Attorney

Do you have a taxable estate? Do you need to make complicated estate planning decisions? Are you involved in international business? Do you plan to bring a suit against the IRS? Has the IRS pursued a criminal investigation against you? Did you commit tax fraud?

If you answered “yes” to any of the above questions, you may be in need of a tax attorney. This type of lawyer specializes their practice in the complicated and often intimidating areas of law, legal systems, and court processes required for tax law. While many individuals do not require a lawyer for tax issues on a regular basis, this type of attorney is invaluable for navigating the system when areas are complex, technical, or downright muddled.

What should you look for when considering a tax attorney for hire? All lawyers in this area of practice must have their Juris Doctor degree and must be admitted to the state bar by passing the state bar exam. These requirements do not set attorneys that specialize in taxes apart from other attorneys. Any lawyer must meet these requirements in order to practice law in a particular state. However, many lawyers that claim to be a tax attorney also have their Master of Laws degree in taxation. This additional training is vital to their overall expertise in the area of tax litigation.

If you are looking for a tax attorney, one of the best ways to find a reputable lawyer that you can trust is to go based on the recommendation of friends and family. However, if that is not possible, there are many online and other routes for attorney hire. Once you have found a lawyer that you think might benefit your case, it is important to schedule an initial interview in order to determine if they are right for you.

First, it is important to ask the right questions to ensure the lawyer is legally able to practice law in your state and that they have met all state bar requirements. Next, enquire about which (if any) area that the attorney specializes. Even among lawyers that work with taxes, a certain tax attorney may specialize in estates while another works primarily with IRS court cases. Lastly, you want to ask important questions such as how much the attorney will charge in order to determine if they fit within your budget. It is important to ask these questions up front so no scary surprises pop up later.

During the initial consultation, the lawyer should have several questions for you in order to get a feel for your case and determine whether or not they are able to help you. You should ask the lawyer if they think they can help your case and if not, whether they have another attorney in mind that may better suit your needs.

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5 Tips To Choose An Ideal Tax Planning Expert

The London accountant is not only known to be a real good bargain when it comes to ecommerce accounting and tax planning services, but they also happen to be one of the world’s best chartered tax accountants to be found – online or offline! 

However, tax planning is a complex affair and needs more than just a London accountant to preside over things with immaculate expertise. What it actually needs is a veteran – one who does not only have the necessary excellence in ecommerce accounting, but also has the foresight and presence of mind to turn a negative situation into a positive one. But for this, you need to know why and how you can choose the ideal candidate for the job of a tax accountant at your firm – irrespective of how small or large the firm is as well as the budget you have allotted for the employee slot.

Here are 5 pointers to help you choose an ideal tax planning expert –

1.    Experience Counts – Experience is a huge point to be taken into account when hiring a ecommerce accounting expert. This ensures that you do not have a rookie or a freshman right off the chartered accounting course. Even though freshmen may suit your budget for the time being, the more inexperience tax planning results may cost a lot more in the long run.

2.    The Track Record of the Candidate – The track record of the ecommerce accounting candidate is crucial to help you decide in favor of hiring him. For instance, it is imperative that you get to know where the guy was posted in and how he helped the same survive the Recession-apocalypse a couple of years back. This can help identify the kind of financial crisis management that your candidate brings to the table.

3.    Communication & Prudence – Communication is another important aspect to consider while hiring tax planning professionals, and so is foresight. Unless the candidate shows a clear blueprint of how he/she intends to save money, curtail budgets and improve on financial results based on his tax planning and ecommerce accounting skills, the interview can be considered a dead-end one!

4.    Taxation Expertise – There are almost a million different intricate details in which tax returns can be filed, as well as used to save money for the firm. Unless the candidate is in the clear about this, the hire is a no-go.

5.    Budget – The budget is also to be kept in mind. Just as a highly salaried individual London accountant does not guarantee good tax planning results, similarly, low-budget ecommerce accounting professionals cannot be done away with without research either. Remember, a lot of London accountants and chartered tax accountants set their fees based on the experience they have gained and not the expertise or skills they have acquired during this period. Use the afore-mentioned pointers to distinguish between the two and make an informed choice.

If you have kept the pointers in mind, hiring the right professional for ecommerce accounting and tax planning is a cakewalk!

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