Tax planning is an important part of personal financial management. Individual taxes take different forms and therefore it is important that everyone has a clear understanding of the subject so as to improve their personal tax planning and management skills. Below are some important tips from RSM Thailand that should help every taxpayer to plan better for his or her taxes in the future.
Classification of taxes
Many people are currently unaware of the different types of tax systems. There is a difference between income tax, local tax, state tax and federal tax. Real estate tax includes a tax that is related to real estate. Investment taxes include: dividends, passive income from shares, bonds, capital gains and interest. Inheritance and real estate taxes are another classification of taxes that applies to individuals. It is a state and federal tax that is levied on an heir or property. Gifts are also taxed. Eligibility tax includes: corporate income tax, social security, Medicare, self-employment sales and federal unemployment.
Get a tax advisor
Tax planning is a difficult process and many people would not feel comfortable with the personal service. Therefore, it is important to identify a highly qualified tax advisor who will take care of the job. Tax advisors will prepare your taxes and make certain decisions that may have an impact on your future. These specialists have knowledge of the subject and are therefore able to provide you with tax advice. Tax advisers can also represent you in control procedures, which are a nightmare for many people. However, there are some factors to keep in mind when choosing a tax advisor.
- Interpersonal skills
- Well known in the industry
- Competent at work
- Rates should be affordable
Tax preparation is both art and science
Mathematics is a scientific bit that is involved in the tax preparation process. Computer programs and calculators are used to invent these calculations.
Tax planning is also an art in the sense that some interpretations must be made in relation to the figures set out in the financial statements. A proactive tax adviser should be able to carry out appropriate research into any circumstances that do not comply with the standard and provide you with a concrete answer.
Individual tax returns
While it is easier to use the services of a professional tax advisor, there are those who prefer to calculate their own individual tax returns. It is advisable to seek professional help so as to obtain peace of mind with regard to the tax calculations presented.
Make sure that you keep adequate records of all receipts and purchases made during the financial year. Have a file and come up with different categories for the purchases and income that you expect to achieve during the year. This makes it very easy to calculate tax returns at the end of the year.