What Is Tax Accounting?

[kebido]

I often hear businesses talk about tax accounting, but I’m not fully clear on what it includes. How is tax accounting different from regular financial accounting, and what are the main responsibilities involved? I’m especially interested in how tax accounting helps with compliance, deductions, reporting requirements, and year-end filings. If anyone can explain the basics and when a business should consider hiring a tax accountant.

 

[isabel]

Tax accounting is concerned with preparation and management of taxes as per the government regulations that help business to remain in compliance, claim deductions and present accurate returns. It is contrasted with financial accounting in the sense that it puts more emphasis on tax legislation, than those of general accountancy and companies tend to employ a tax accountant where their finances or tax liabilities seem complicated.