Learn How to Do Taxes

Whether you plan to seek professional help or prepare your taxes on your own using free Internal Revenue Service resources, you’ll want to follow specific steps to ensure you get the most accurate refund or payment information possible. This guide can help you do just so.

Do You Have to File Taxes?

Before you start your taxes, remember that you actually have to file taxes this year. With many people’s financial situations in flux throughout the pandemic, there’s a chance that something happened in the past two years that affected your need to file taxes. If you didn’t generate a large enough income or if someone has claimed you as a dependent when filing their taxes, you may not need to at all. But it is worth it to file just in case—you could wind up with a tax break or find out you qualify for tax credits you weren’t aware of.

What Do You Need to File Your Taxes?

Regardless of how you decide to file your taxes (through a professional, free online service, or by mail), you’ll need to gather a couple of things to get started:

Identifying Information

  • Your Social Security number and those of any dependents or spouse if applicable.
  • Your adjusted gross income (AGI) from last year’s tax return.

Income Statements and Receipts

  • W-2 forms from all employers to show the full amount of annual wages.
  • Income receipts for any real estate, property leasing and rental, trusts, partnerships, corporations, and royalties earned.
  • Social Security benefits claimed.
  • Unemployment benefits received.
  • All receipts from your small business or freelance expenses.
  • 1099-INT forms to account for any income made from interest during the tax year.
  • 1099-R forms to show retirement distributions taken during the year.
  • 1099-DIV forms for dividends paid out from investments.
  • 1099-C for any canceled or forgiven debt (considered income by the IRS in many situations).
  • 1099-G forms for tax credits and refunds offsetting local or state taxes.
  • Medical bills that were not reimbursed.
  • Expenses for your education or student loan interest.

ACA Forms

  • 1095-A forms showing your Affordable Care Act Marketplace Health Insurance statement.
  • 8962 forms for recipients of premium tax credits.

Find Out How Much Tax You Owe

The US tax system is progressive. This means that those taxpayers with higher taxable incomes will pay higher federal income tax rates and vice versa for those with lower taxable incomes. How much tax you owe the government is decided by various factors, with the main one being your tax bracket. By adding together all taxable income you’ve received throughout the year, you can determine what tax bracket you are in, and thus the rate at which you will be taxed. Luckily, regardless of your tax bracket, you won’t be taxed at that rate for your whole income.

Determine How You’ll Be Filing

Now is the point that you must consider how you’ll be filing this year’s taxes. There are plenty of reasons to choose one option over another, but some options will be closed off to you depending on when you get around to filing. You cannot file any prior-year tax returns via self-preparation websites; instead, the forms must be printed, signed, and mailed. If you’re preparing taxes from prior years, remember to print a copy of your return; otherwise, you’ll have to order a transcript that varies in information depending upon your request.

It’s worth noting that the IRS only allows taxpayers to file for the current tax year using IRS Free File. If you also need to file a return for a previous year, you’ll need to fill out the applicable online forms. You can pay your tax bill directly on the IRS website or view information to check on the details of your return. To qualify for filing using the IRS Free File program, you’ll need to have less than $72,000 of AGI.

Hire a Tax Preparer

For individuals whose tax situations are a little more complicated due to assets or business ownership, we recommend hiring a tax preparer for their invaluable insight. Or, if you’re feeling particularly confident about your tax preparation abilities, consider taking courses with Universal Accounting and becoming a professional tax preparer.

Choose Between Itemized and Standard Deduction

At the beginning of your tax filing process, you must determine whether you would like to claim whatever the standard deduction would be (for individuals filing in 2020, it was $12,400) or if you will be itemizing your deductions for the year. It is markedly easier to claim the standard deduction and frequently is higher than itemized deductions for the typical filer. That said, if there are specific expenses you can think of that impacted your tax year—uninsured losses, large donations to qualified charities, considerable out-of-pocket medical, dental, or vision expenses—itemizing your deductions may be the way to go to ensure you’re getting the most significant benefit or minimizing your tax payment as much as possible.

Filing Your State Taxes

Once you’ve completed all federal tax forms for the year, remember to file a return for your state taxes too. The majority of states require you to file a separate tax return for state taxes, and it’s best to get that done while you take care of your federal one. Why? Because certain states tax certain goods and income at different rates than the federal government, and some states have no income tax or tax on certain types of interest or dividends received in a year. For all these reasons and more, it’s best to err on the safe side and submit a separate return every year.

Paying Taxes Owed or Getting Your Refund

If you owe money to the IRS, you can pay with electronic payments, credit or debit cards, checks, wire transfers, even cash. If the amount you’re faced with is a little daunting to pay all at once, you can set up an IRS payment plan (with both short and long-term options available).

However, for those getting a refund, all you have to do is sit tight and wait for the money to come in. Need it to hit a little faster? The only things you can do to ensure your tax refund comes as quickly as possible are to file your return digitally (as paper returns take from six to eight weeks to process) and arrange for your refund to come via direct deposit, a much faster option than by mail.

Learn How to Start Your Own Tax Filing Business

If you’re ready to go from filing your own taxes to opening your business helping others with their tax needs, Universal Accounting is your go-to resource for starting and growing your successful accounting firm. Learn more here.

How to Be a Tax Preparer: An Overview

When tax season rolls around, most Americans begin to stress, considering all the ins and outs of getting their income correctly reported to the government and trying to get the biggest refund (or minimize tax payments necessary) possible. However, there are some individuals for whom tax season is an exciting business opportunity: tax preparers.

What Is a Tax Preparer?

While the digital landscape has changed the game for how people can file taxes, with many government programs and third-party apps offering a way to do everything—file, pay, receive payment—online, these tools are not one-size-fits-all. Many individuals will begin submitting information via a digital platform only to find that their situation requires more care and personalized attention. In these cases, and in those where the filer either has no interest in filing their own taxes or knows from the beginning that they need special assistance, taxpayers seek the help of a professional tax preparer.

Tax preparers are professionals who assist individuals or businesses with completing, preparing, and filing tax returns. In some cases, such as audits or tax court issues, tax preparers can also help defend a taxpayer against the Internal Revenue Service, but this is decided by their credentials and whether they have legal representation rights. There are different types of accredited and non-accredited tax preparers.

Accredited Tax Preparers

Tax preparers with credentials are typically professionals who work full time in the field of tax accounting all year, such as:

  • Tax attorneys who are licensed by their state bar associations.
  • Certified public accountants who are accredited by their state boards.
  • Enrolled agents who are accredited by the IRS.

Non-Accredited Tax Preparers

There are many other types of careers in tax and accounting that are not accredited positions. These are individuals like tax accountants who have not been certified by the American Institute of CPAs, an employee of an annual filing season program or tax store, and volunteers for the Volunteer Income Tax Assistance program.

Individuals who are only interested in working during tax season may only be interested in positions like these. But, if you’re looking to begin a promising new career as a tax preparer, there’s never a better time than now to start.

What Are the Steps to Getting Certified?

  1. Take a tax preparer certification course. With Universal Accounting, attaining Professional Tax Preparer certification has never been easier. Not only does our program contain more than 65 hours of training videos, but it also provides access to more than 600 pages of reference and instructional materials in the form of books and worksheets. All Universal Accounting courses are taught by experienced tax accounting professionals ready to teach you what you need to know to get where you want to go. Through courses including Establishing the Tax Foundation, Profitable Business Returns, and Building a Successful Tax Practice, you’ll learn the entirety of the tax preparation process.In each course, the instructors provide real-world examples, solutions, and advice to help you embark on your new path—whether that’s toward starting a small but profitable side-gig or opening a large accounting firm. And you’re not just kicked out the door at graduation. Instead, graduates of the Universal Accounting courses maintain access to our Job Placement Assistance Program. In this program, we help students improve their resume preparation and placement skills, interviewing techniques, and more. Graduates can also work with a personal achievement coach to help them land their next career.
  2. Apply for a preparer tax identification number. To prepare or assist in preparing tax returns professionally, you need to have a preparer tax identification number (PTIN). It is vital to get this number as early as possible and remember that it needs to be renewed annually. It takes around 15 minutes to apply online and costs $35.95 (which you can pay by credit or debit card).
  3. Check your state’s requirements for tax preparers. As far as regulations go, tax preparers are bound by different laws in different states. Always remain aware of the requirements and regulations you are responsible for meeting in your state of licensure. States most known for their tax preparer regulations are New York, California, Maryland, and Oregon.

How Much Does it Cost?

Depending on your pace and other factors, you are likely to have to spend around $5,000 a year on tuition, not always including books and other fees. While the cost of becoming a certified tax preparer may vary from state to state, our courses at Universal Accounting have some of the lowest costs for the value and offer a flat rate with no hidden fees. The fee for our 2021 Professional Tax Preparer Program is only $2,719 and does include fees for books and other materials. The affordability aspect is one thing that tends to be a lure for many individuals looking to gain more education to enhance their career, as it is more feasible to pay tuition in one lump sum or take out a small loan to cover the costs (a small price to pay for a new career path in which you can make up to $100/hour).

And, at Universal Accounting, we’re so confident our courses will help you make your dreams of becoming a tax preparer a reality, we offer a money-back guarantee. If you don’t think that your education lived up to expectations at the end of your tax preparation course, you can return your materials and get 100% of your money back (minus interest) guaranteed.

What Is the Timeline?

It typically takes the length of the 60-hour qualifying training course as well as the time it takes to get your licensure registered with the state to become a certified tax preparer. That includes short processes like receiving your PTIN and longer waits such as applying for an electronic filing identification number (EFIN) or state licensure.

After this point, you’ll be ready to jump into your new tax preparation career. You may experience a learning curve on some end of the business or another, be that client relations, tax season navigation, or marketing your services. But with tax preparation, like anything else, all good things come in time.

Ready to start on your journey? Reach out to us for more information and one of our UAC advisors will be happy to get in touch.

Universal Accounting & Virtual Bookkeeper’s Roadmap Press Release

Universal Accounting Center (UAC), an accounting school for small business accounting, bookkeeping and tax professionals is joining forces with Veronica Wasek to help bookkeepers grow their businesses by offering them a proven work flow (standard operating procedures) and business system to organize and operate their firm efficiently and profitably.

“It just made perfect sense for us to team up with Veronica,” said UAC President & CEO, Roger Knecht. “For years we’ve emphasized the 3 keys areas to have the premier accounting firm and she nails it when it comes to the production side of the business.”

“Universal offers accounting professionals the resources, training, certifications, coaching and support needed in today,” said Veronica Wasek.  “I’m excited to work with them to help accounting professionals build successful businesses. Partnering with them is such an exciting opportunity.”

In the past few years Roger and Veronica have had various conversations about the accounting profession.  Running into each other at various accounting conferences this is now the opportunity to work together.

For more information about this opportunity and how it applies to you GO HERE!

To find out more, visit https://5mbacademy.teachable.com/p/bk-roadmap

For nearly 40 years Universal Accounting Center has offered premier training to professionals wanting to provide financial services to small businesses. UAC training helps students develop not only crucial financial skills but also the marketing know-how to help promote those services. Skills are taught through a patented home-study course that is available online, allowing students to learn at their own pace. Certifications available are: Professional Bookkeeper (PB) QuickBooks Specialist (QS) Professional Tax Preparer, (PTP). More information about Universal can be found by calling 1-800-343-4827 or visiting www.universalaccountingschool.com.

Scott Barhold, from employee to owning a successful accounting firm

Like so many others Scott Barhold needed to start and build his own successful accounting firms offering with confidence his services. Hear him share his story and the lessons learned that will help you be in business for yourself but not for yourself.

Understand why Scott says the secret is having the confidence and the competence to do the work.

Listen to Scott explain why MAPPING the business is the best way to run the business.

In the webinar Scott speaks of the following four keys to his success:

  1. Book “in the BLACK” – get your free copy here
  2. The Universal Practice Builder program
  3. Pricing your services correctly
  4. Having a skilled business coach on your team

Vina Spickler takes the leap to have a successful accounting firm

like so many Vina felt that after working for the company after company in her accounting career the time had come to get paid what she was worth and start her own business. As you can imagine it was a leap of faith but it quickly paid off and then some.

Hear Vina share your story and see what you can also do to start and build your accounting firm with confidence.

Vina Spickler
Sandpiper Accounting, LLC

As part of this webinar it was offered, a FREE copy of the e-book “in the BLACK” – get your copy now!

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