Get Tax Accounting Assignment Help in UK
Before focusing on tax accounting method , let start with the little description of accounting method. ACCOUNTING METHOD is that method that focuses on income and expenses and making report of these for taxation purposes. The taxpayers are required to choose a particular method of accounting which could reflect their income for each year while maintaining consistency in the method of accounting and if there is any need to change the method the person or the taxpayers need to get approval from Internal Revenue Service.
Tax Accounting Assignment Help consists of accounting methods that concentrates only on taxes instead of public financial statements. Tax Revenue Code governs tax accounting which prescribes particular rules and regulations for individuals and the companies that they must follow to while preparing for their tax returns. The principles of taxes differ from general accounting principles. Lot of countries (European countries) follows Generally Accepted Accounting Principles while American accountants have two different options including GAAP (Generally Accepted Accounting Principles) and tax accounting.
In GAAP and as per its principles, all financial transactions need to be recorded and accounted while tax accounting concentrates on the transactions creating an impact on the tax situations of a company.Many companies hire specially qualified persons for handling such tax returns and financial statements of company. Tax Accounting Principles are much simpler than the principles GAAP. When the changes under GAAP become too expensive, companies generally get directed to the principles of taxes accounting. Under sector 446 (a), tax accounting focuses on the consistency related to the method of tax accounting with reference to the applied financial accounting and it is must for the taxpayers to relate their preference with a particular method for providing such accounting details or information.
Tracking the funds that are related with a business organization or an individual is the basic purpose of tax accounting. Tax Accounting is concerned with the profit in a financial year and how much tax is payable on that profit. The term is more complex to understand and to implement in real life. Books may define tax accounting using simplest words but in reality it’s not easy to handle; it need lot of understanding, knowledge and practicing. While the accounting is consists of all financial transactions, tax accounting consists of only on tax related transactions, calculations and tax documentations. Tax Accounting methods and principles may differ for an individual and a business organization. Some of the basic things to take care that could form just a knowledge factor for an individual or a company includes the following:
- TAX ACCOUNTING FOR AN INDIVIDUAL: Personal expenses are not considered in tax implications. Tax accounting for an individual includes the calculation of the funds that come in and come out of person’s possession. It mostly includes income, gains or losses related with investments, or any other transaction that affects tax burden of an individual.Such cases are quite delicate and create a need for such individual taxpayers to concern tax accountant who could handle their cases and could assist them though it is entirely the individual’s decision whether he or she is in need of tax accountant or not.
- TAX ACCOUNTING FOR A BUSINESS: just like individual tax accounting, business related tax accounting is also related with the all incoming funds that could be a part of company’s overall earning. Apart from this, there is also an additional criterion that is included in this. It tracks the outgoing funds following the business obligations. This will further classifying the exchanges in the funds between two business It is specific to business expenses and also the funds related to shareholders. However, it is not necessary for an organization to have the use of tax accounting but due the complexity of the records such methods become necessary to run the business with an ease.
- There are also some other organizations that are tax-exempt and tax accounting become necessary for the. They provide information of their incoming funds, donations or how they are operating to have the use of such funds etc. in their annual report of financial year. This further help such organization to remain attached with the laws or legal rules & regulations that further govern operation of a tax-exempt entity with an ease.