Income Tax Preparation

Income Tax Preparation

Tax Preparation Service Options 

When the U.S. tax season rolls around, individuals and businesses alike must navigate the complexities of income tax preparation. This is even more important when foreign income and assets are involved, as this necessarily increases the complexity of your tax filings and hence, the filing requirements. There are several tax preparation service options available to taxpayers, each catering to different needs and budgets. Some of the most common choices include:

1. Certified Public Accountants (CPAs) and Enrolled Agents (EAs) – These professionals provide expert tax services and personalized advice. They are ideal for individuals with complex tax situations, business owners, and those seeking strategic tax planning. Asena Family Office’s team of Enrolled Agents and CPAs are well-equipped to help you navigate the complexities of the U.S. tax system and will prepare a tax return that is accurate, and that also considers the nuances of your particular situation (whether or not you have foreign assets and income).
2. Tax Preparation Firms – Companies like H&R Block and Jackson Hewitt offer in-person and virtual tax preparation services. These firms have preparers who assist with tax filing at varying price points. Even if your situation is not a complex one, Asena Family Office can also provide the services of the above firms in a cost-effective manner while offering a personal touch that larger firms will struggle to provide.
3. IRS Free File Program – This option is suitable for those with lower incomes and very simple tax situations (i.e., one job with one Form W-2) who qualify for free tax preparation software or IRS-approved volunteer tax assistance.
4. Tax Software Solutions – Services such as TurboTax, TaxAct, and H&R Block online provide an affordable way to file taxes electronically with step-by-step guidance. However, you should note that these tax software programs may not be able to help you navigate the complexities of cross-border situations, nor can they offer the personalized service you would come to expect from a tax preparer.
5. Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) – These IRS-backed programs offer free tax help to eligible individuals, including low-income earners and seniors.
6. Do-It-Yourself Paper Filing – Some taxpayers prefer to file their returns manually by completing tax forms and mailing them directly. However, this is not recommended for several reasons: 1). Nearly no one prepares tax forms by hand anymore, and, furthermore, nearly no one mails in return anymore unless there is a specific reason they must do so (i.e., there is an obscure form that cannot be e-filed); and 2) unless one has a very simple tax situation. We have come across many people with foreign income and assets who have attempted to prepare their own taxes and have inadvertently put themselves in a situation where crucial forms were not prepared and filed, resulting in increased penalty exposure and remediation work required later.

About The Program 

Depending on your budget and unique requirements, there are several options available to you when it comes to tax preparation, as we discussed in the previous section. Many tax preparation programs and firms exist to help individuals and families file their taxes efficiently and accurately. Asena Family Office is one of those firms offering professional, timely, and courteous service while getting to know you and your specific situation in order to provide advice that is tailored to your unique situation at a price point that is competitive and fair.

How It Works

Tax preparation programs and firms typically follow these steps:

1. Eligibility Assessment – Determine what sort of service you qualify for and at what cost.
2. Document Collection – Gather the necessary documents, including identification and income records.
3. Appointment or Online Submission – Visit a tax professional in person or upload your documents to an online platform.
4. Tax Preparation & Review – A tax expert or software processes your return and reviews it for accuracy.
5. Filing & Confirmation – Your return is submitted electronically or via mail, and you receive confirmation of submission.

Tax Preparation Checklist 

To ensure a smooth tax filing process, use the following checklist:

• Identification documents (passport, driver’s license, etc.)
• Income documents (such as Form W-2, 1099-INT, 1099-DIV, 1099-NEC, and others)
• Expense records (if applicable, if you are running a business)
• Banking information for direct deposit
• Prior year U.S. and foreign tax returns (if available)

Identification Documents, Such As: 

• Social Security card or ITIN
• Driver’s license or government-issued ID
• Taxpayer identification numbers for dependents

Income Documents, Such As: 

• W-2 forms from employers
• 1099 forms for contract work, dividends, or other earnings
• Social Security benefits statements
• Unemployment compensation records
• Retirement income statements
• Rental income documentation
• Foreign returns
• Foreign bank account records
• Foreign investment account statements

Who Is Eligible For Income Tax Help? 

Free or discounted tax preparation services such as VITA are available to individuals who:

• Earn a low-to-moderate income
• Are seniors, individuals with disabilities, or speak limited English
• Qualify for the Earned Income Tax Credit (EITC)
• Are military personnel or veterans

However, even if you do not meet the criteria above (which most people will not), there are still plenty of cost-effective options available to you. One of those options is the Asena Family Office, offering decades of expertise in U.S. tax preparation while taking into consideration your specific circumstances and needs.

Valuable Tax Credits 

Tax credits can significantly reduce your tax liability. Some of the most valuable credits include:

• Earned Income Tax Credit (EITC) – For low-income earners
• Child Tax Credit (CTC) – For families with dependent children
• Education Credits – Such as the American Opportunity Credit and Lifetime Learning Credit for university students
• Saver’s Credit – For retirement contributions
• Energy Efficiency Credits – For home improvements such as heat pumps and solar panels
• Foreign Tax Credit – for those who have paid tax in a foreign country

The Benefits Of The Program To You: 

• Accurate tax filing reduces errors and potential audits
• Maximizes tax refunds by claiming eligible deductions and credits
• Saves time and eliminates the stress of doing taxes alone
• Provides access to expert tax advice and planning

FAQs 

What Do I Need To Bring For Income Tax Preparation? 

You should bring identification documents, income statements, prior tax returns, and any deductible expense records.

How Much Does It Cost To Have Someone Do Your Taxes?

Costs differ based on the preparer’s expertise. CPAs and EAs typically charge more than franchise tax firms or volunteer services, but they also offer more expertise and a more personalized service.

How Much Does It Cost to Have My Taxes Prepared? 

The cost varies depending on the complexity of your return. Professional tax services can range from $500 to $5,000 or more, while online software solutions often cost between $100 and $350, and VITA is free. However, it is important to note that a cheaper solution is seldom a better one. Indeed, we have come across many people who wanted to get it done for cheaper and have ended up with huge penalty exposure, incorrect tax forms, and the stress and headaches associated with dealing with the Internal Revenue Service and state tax agencies. Don’t let this happen to you; reach out to experts such as the Asena Family Office.

Where Is The Best Place to Get Your Taxes Done? 

The best option depends on your needs. If you have a very simple tax return (such as one job with one Form W-2), an IRS Free File or tax software may be ideal. For many other situations, hiring a CPA/EA, such as the Asena Family Office, is recommended.

Can I prepare my own taxes? 

Yes, you can prepare your own taxes using tax forms or tax software. However, if your tax situation is complex, professional assistance will be beneficial. Equally importantly, hiring a professional who is knowledgeable about complex tax situations and the reporting of foreign income or assets will help you avoid the huge penalties that are often associated with the incorrect filing of foreign information returns.

By understanding your tax preparation options, required documents, and potential credits, you can make informed decisions to ensure a smooth and efficient filing process. If you have questions about your taxes or would like to know what options are available to you, please contact Asena Family Office today for a no-obligation, free estimate.