Tax accounting involves filing of tax returns and payments for a business or individual. Tax accounting is applicable to different entities required by law to remit taxes. The law requires that businesses, individuals and corporate entities should submit different kinds of taxes depending on the nature of activities carried out. The purpose of tax accounting is to be able to trace and associate income to the source for taxation purposes. It is also important to note that taxable income differs from accounting income due to different treatment of inter period allocation and methods for income determination.
Many students face difficulties when handling different tax accounting tasks due to the detailed and complicated calculations. We offer tax accounting homework help that will simplify the calculations for you. Our experienced experts understand tax accounting principles from different countries. Our service best serves those looking for do my accounting homework for me.
Tax accounting principles and GAAP
According to AccountingTools, when accounting for tax, tax principles applies as opposed to other types accounting which applies the general accepted accounting principles. Tax principles tend to vary from one country to another while the generally accepted accounting principles are the same.
Under GAAP, compilation of accounting statements is done in accordance to established accounting procedures, principles and standards. GAAP standards provides for a set of concepts and standards that are specific to a given industry in the economy. On the other hand, tax accounting handles those transactions that affect the company tax liability. The governing of tax principles is by the body; Internal Revenue Service (IRS). IRS ensures that companies abide to the laid tax accounting as laid out in the law.
Tax accounting for a business
Tax accounting for a business is complex and detailed depending on the nature of activities carried out by the organization. A tax expert should analyze more information in order to track the income generated and determine the tax obligation of the company. Tax accounting for business becomes complicated in case of outgoing funds directed to certain business obligations for instance payment of dividends. Big organizations usually have a position for tax accountant who oversees the tax obligations of the company, in small organizations financial accountant may carry out tax accounting.
Tax accounting for tax exempted organizations
Tax accounting is compulsory for tax exempted organizations. It is a requirement by law for all organizations to file for tax annual tax returns at the end of a specific time period. Tax exempted organizations should file for information regarding their source of income such as donations and grants and spending of such incomes by the organization.
Tax accounting for an individual
The tax accounting for individual is simple as compared to that of a business; this is due to the simplified nature of information involved. The law requires individual tax payers to file for tax returns for a specific time period. The individual tax transactions arise due to transactions which involves income gain such as employment, investment gains and tax deductions. Individual tax obligation varies depending on the level of income or profits.
Temporary difference and permanent difference
It is normal for the amount recorded as a tax expense to differ from actual amount paid to revenue authority. The difference is either temporary or permanent difference.
Refers to tax difference that result from different time recognition of an income activity or an expense. Temporary difference arises due to the manner in which a company handles prepaid expenses and incomes. Other sources of temporary difference include accounting for depreciation and amortization, inventory valuation and difference in accounting statements arising from fluctuation of foreign currencies.
Permanent tax difference arises due to the income items which are in financial accounts but not for taxation purposes. Recording of some items in the financial statements and books but are not put on tax returns. Causes of permanent tax difference include fines and penalties. They emanate from violation of law, interest income on tax exempted securities and life insurance payments.
Tax accounting homework help
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