As with most people in America, the goal is to get the most money back at tax time without violating any laws. The few big earners are happy with just owing less than they did in the previous year. Either way, tax preparation is a major factor in everyone's life.
While people think they are taxed to death, individual tax rates are close to being the lowest ever for most tax brackets. The 10% and 15% brackets often end up paying no taxes at all with the credits and deductions they get. So their effective tax rates are often negative, believe it or not.
The upper income people are taxed at 35%, but if the Bush tax cuts are not continued that rate will rise back to 39% beginning in 2011. Congress is going to have to make many decisions on extending these previous tax cuts before the end of the year. If they fail to do so it could hurt their reelection chances so the odds are in favor of them extending most the tax breaks with the possible exception of the estate tax.
Tax preparation is often dreaded and feared by many out there. It does not have to be that hard though and there are many tips available to help you find the most deductions possible. Many times your CPA will be able to tell you things that will help you plan out your expenses for the next year as well.
Charitable deductions are one place that many people can easily get more of a deduction on their returns. Others often fail to claim the right amount of child tax credits or dependents. These are all very easy things that any qualified CPA should be able to help you with.
While there currently is not a so-called marriage penalty tax anymore, that could change next year if the current rules do not get extended. Then each person will need to figure out if filing married single is better than married for their federal returns. That brings up another good point.
Now, it does not matter at the federal level if you file married jointly or married single. However, on the state level it could make a big difference. For example if one spouse makes quite a different amount that the other, the tax owed could be different for the total amount of taxes due. That is why it is important to run the numbers both ways on the state level.
While this could be complicated and take more time, any good CPA or tax preparer will gladly do this for you as their basic service. If they refuse you should find someone who is more knowledgeable about minimizing taxes to their clients.
Tips like these should provide the client with confidence that their CPA is an honest and upstanding person who represents them to the best of his or her ability. Ethics is a very important subject to these people and you will find most professionals to exercise proper care and confidentiality with their clients.