Capital gains sounds intimidating, especially if you’ve never dealt with it before. Whether you are a corporation in need of a business accountant or an individual seeking a CPA in Utah, we can help elucidate you on the details of the subject.
What is Capital Gains?
A capital gains tax, put simply, is an excised tax on a financial gain, or profit, made from the sale of assets. This tax is not exclusively limited in scope to businesses. If an item is sold for a profit and the gain is greater than the cost of the item, the tax becomes applicable, even to an individual citizen of Utah.
When it comes to the direct cost of the item, it isn’t merely limited to the acquisition price. Any investment cost, such as repair work, applies to this concept. Capital gains is relevant if the sale yields a return exceeding both the cost and investment of the sold item. The sold item could be a personal possession or product.
The rate of the capital gains tax is 15%. Combine that figure with the personal income tax rate of 4.95 percent, and the tax burden adds up to 19.95 percent.
Fortunately, there does exist a useful perk for being a resident within the state of Utah. Taxpayers in Utah have the privilege to claim a credit of 5 percent on any of their capital gains, provided the majority of the proceeds, which must be at least 70 percent, are used to acquire stock in a Utah small business within a 12-month period.
The best way to prepare yourself or your company for tax returns is to invest in a CPA in Utah. Your accountant in Utah can review your income, in addition to any pertinent expenses and deductions you may have incurred.
Upon determining if any money is owed, they can provide you a strategy for paying the taxes. For businesses, it is highly recommended that the taxes be paid for every quarter.
The CPA in Utah can provide courtesy reminders regarding the money owed. They can best achieve this particular result by tracking the monthly payments. Most importantly, the business accountant can arrange a payment plan for outstanding taxes owed, usually in the form of installments. Depending on the nature of the situation, they can contact tax authorities for a settlement, depending upon the degree of tax debt.
Things To Remember
Here are the main things to remember regarding capital gains: Capital gains are taxed at 15 percent. Capital gains become applicable if your total profit exceeds the total cost of the sold goods.
Businesses and individuals in the state of Utah are subject to capital gains if they make a sale on an asset that makes them a profit.
CPAs can help you navigate the tax system to best prepare you or your company for dealing with capital gains. You can qualify for a tax credit of 5 percent of the capital gains if 70 percent of the profit is to be invested in a small business within the state of Utah.
If you have questions or concerns, please seek the services of an accountant in Utah to best be prepped for successfully dealing with capital gains.