Press Release (ePRNews.com) - PHOENIX - Sep 08, 2017 - Tax Services Phoenix Tax Planning LLC
It is estimated that taxpayers and businesses spend over six billion hours every year complying with tax-filing requirements. As a comparison, if all this work were done by one company, it would need approximately three million full-time employees.
Although the details of taxes can be quite complex, the income tax process is pretty straightforward. In reality, though, most Americans would rather not understand the process. So, more than half hire a tax professional to help in their annual filing.
Of course, the tax process begins with income. Most income received is taxable. Gross income includes income from work, investments, interest, pensions, and other sources. The gross income from all these sources is totaled to compute a taxpayers’ gross income. So, then what is not counted as income? Things like child support payments, gifts, inheritances, workers’ compensation benefits, welfare benefits, or cash rebates from a dealer or manufacturer.
Once gross income is calculated, adjustments are then subtracted. Adjustments include alimony, retirement plan contributions, half of self-employment, and moving expenses, among other items. The result is known as adjusted gross income. From there, deductions are subtracted. Taxpayers have two choices when it comes to deductions. They may elect to use standard deduction, or itemize their deductions, whichever is greater. Itemized deductions are things such as state and local taxes, charitable contributions, the interest on a home mortgage, some and specific unreimbursed job expenses, as well as the cost of having your taxes prepared, among other things. When selecting a firm for your tax services Phoenix (http://www.phxtaxplan.com/) Tax Planning LLC is there for you.
After deductions have been subtracted from adjusted gross income, the personal exemption is subtracted. This will change from year to year but almost always increases. The remaining amount is taxable income. From there, gross tax liability is deduced. But, as they say, there’s more.
Any eligible tax credits are then subtracted from the gross tax liability. Taxpayers may receive credits for a variety of items, such as energy-saving improvements. The remainder is the taxpayer’s net tax.
Knowing how the tax process works is daunting in itself. Actually doing the work can be even more so. For expert tax services Phoenix Tax Planning LLC is the first place to call.
Phoenix Tax Planning LLC