What is Tax preparation?
Tax preparation is the systematic process of organizing financial records, calculating taxable income, identifying eligible deductions and credits, and completing required tax returns for submission to federal and state tax authorities. Adequate preparation requires maintaining accurate documentation throughout the year, understanding applicable tax laws and regulations, and implementing strategic planning to minimize overall tax liability while ensuring full compliance with filing requirements. Business tax preparation encompasses organizing revenue records, categorizing deductible expenses, calculating Depreciation and amortization schedules, preparing quarterly estimated tax payments, and filing annual returns appropriate for the entity structure. Individual tax preparation involves gathering income documentation from employers and financial institutions, itemizing deductions or claiming standard deductions, calculating credits such as the Child and dependent tax credits, and filing Form 1040 by the applicable deadlines.
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