Informing Your Tax Attorney about Your Business Income
Your tax attorney won’t be able to adequately review and structure your financial affairs if he doesn’t understand where your money’s coming from and how it gets to your bank account from your business.
Only you and only you possess the needed answers to all the questions your tax attorney has about your business income so if you wish him to help you, you need to help him understand your case first.
Tips on Making Your Tax Attorney Understand Your Business Income
Source of Business Income – Where do you get your money? What’s your primary source of income? Does the income from your primary line of business go to you alone or is it shared with your partners? Do you have any secondary sources of income? Are you receiving pension, alimony, or support from any other person? Have you recently received an inheritance or other types of donation?
Products and Services – What is your main line of business? You can obtain additional discount from the government depending on the type of product or service that your business is offering. Make sure that you also inform your tax attorney about the rates you’re charging and any other secondary products or services.
Business Costs – List down all the costs of your business for the last six months. Doing so will help your tax attorney determine which costs are fixed or variable and which ones can be considered as operating costs and therefore deducted from your taxable income. License fees may also be considered as allowable expenses so be sure to inform your tax attorney about it if you’ve paid for them recently.
Accounts Payable – There are certain financial obligations that an Internal Revenue System (
Accounts Receivable – Money that other people owe you for services rendered may be considered as part of your business income. Determining the correct answer to this will require you to inform your tax attorney once more about this particular detail regarding your business income.
How the Business is Being Run – The government also offers certain deductions if you’re able to convincingly prove that your business is running according to the standards set by the government. These deductions will ultimately cause your business to have a smaller taxable income than usual.
Withdrawals – If you’ve made any withdrawal from your business, this may affect your financial affairs in general and your business income to be more specific. Understanding the nitty-gritty of your business income can be a challenge to your tax attorney if you don’t follow the SOP on reporting your income to the necessary authorities. In this case, the least you can do is cooperate with your tax attorney fully by answering all the questions he asks and volunteering additional information that you deem pertinent to your case.
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