Tax Accounting
What is Tax Accounting?
Tax accounting focuses on the preparation, analysis and presentation of tax returns and tax payments.
How Does Tax Accounting Work?
For example, Company XYZ might use one accounting method for calculating depreciation when it reports financial results to investors, but tax laws may require it to use a different method for tax accounting purposes. As a result, Company XYZ might have one net income number on the financial statements filed with the SEC and a different net income number filed with the IRS.
Why Does Tax Accounting Matter?
Although tax accounting largely follows generally accepted accounting principles (GAAP), in a few ways it is quite different. This is why you might hear analysts discussing the difference between "book and tax," meaning the differences between GAAP accounting and tax accounting. Tax accounting takes special training and education, which is why some accountants specialize only in taxes.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
