High Tower Company President, Rebecca Olson.
By, Macy Goodnight; Rebecca Olson of High Tower Business Solutions is thoroughly knowledgeable in providing answers to the deluge of questions that come with the impending tax season. Her prowess built on years of experience and education has given her an expert edge in ensuring her clients find superior financial success, not just at tax time, but throughout the entire year.
At High Tower Business Solutions, located at 121 W. Commercial St., in Broken Arrow, Rebecca provides accounting, payroll and bookkeeping services for both personal and business accounts, with an emphasis on tax returns and planning. Her passion is truly helping others find financial stability and success, and with that, she provides a wealth of valuable information and tips for a healthier financial foundation.
Here are a few of the most common questions Rebecca has been asked and passed along to us:
What is the difference between bookkeeping and accounting?
“A bookkeeper is trained to enter transactions and reconcile accounts. An experienced bookkeeper can do light journal entries,” she said. “An accountant, however, is able to interpret and correct if needed, financial statements and provide companies with reporting that depicts an accurate financial picture. A tax accountant specializes in understanding the tax implications behind each transaction and can offer high-level tax strategy.” There are many tax professionals, but when choosing one, individuals and business owners will want to make sure that their accountant is both licensed and current in educational requirements, and will be able to represent them through an IRS audit, should it ever occur. “Only CPAs, attorneys, or enrolled agents can do IRS representation,” said Rebecca. “Your professional should have a strong understanding of tax law and the ethical laws that surround it all.”
Any new changes when filing my taxes this year?
“Alimony payments are no longer a deduction for the payer, and no longer considered taxable income to the recipient. This only applies to divorces finalized by Jan. 1, 2019.
“Taxpayers noticed the standard deduction almost doubled for 2018, and those amounts actually went up again for the 2019 filing year,” Rebecca said. “One of the most common questions I receive is, ‘should I still keep track of my out of pocket medical expenses?’ I always take whichever is greater of the two, the standard deduction or the itemized deduction, so, by all means, keep track of your medical expenses. You never know when we add in your mortgage interest, real estate taxes paid and charitable contributions, that amount may qualify you to itemize.”
What’s the difference between a deduction and a credit?
“A deduction just reduces the income that is then subject to income tax rates,” said Rebecca, “versus a tax credit that reduces your tax owed dollar for dollar.” For example, if the amount owed is $3000, and the taxpayer has a $2500 tax credit, the amount of tax owed is reduced to $500. “Again, a tax credit is a dollar for dollar reduction of taxes owed. Though that all sounds simple, tax credits are really specialized and very finite,” she said. “They have to be used the right way and meet very specific criteria in order to be claimed.”
A common tax credit many taxpayers will see when they file their 2019 taxes is the $2000 child tax credit, which continues to be an increase of $1000 per child and part of the Tax Cut and Job Act (TCJA) of 2018.
How can a professional accountant help me?
In addition to the insight and vital knowledge of tax law that a professional can provide, building a relationship with your accountant can be beneficial in every aspect of an individual or business’s financial journey. “A relationship with your tax preparer is crucial, and that’s because as they learn things about you, they know to ask the right questions to save you money and help you plan better,” said Rebecca. “It helps to know if you had a child go to college, or you did energy-saving renovations on your home, so you don’t miss out on those tax credits.” A tax professional can offer strategies and planning for not only tax time, but for future savings and stability. Simply put, they can save you on costly mistakes.
For more information, or to schedule a consultation, call High Tower Business Solutions at (918) 615-9887 or visit the website at www.tower-business.com.
See more about Ask an Expert - A Financial F.A.Q.: