If you’re a small business owner, it probably doesn’t surprise you that you need to pay taxes. While some business owners will file their taxes independently, there comes a point in every business where it becomes necessary to hire a tax preparer.
Typically, hiring a tax preparer is a step a business needs to take when getting together everything necessary to file federal, state, or local taxes becomes too much for the business owner or their accounting staff to deal with on their own. Often, this is because the business has expanded to the point that the owner needs to be involved with other aspects, such as operations or sales, and simply does not have time to deal with all of the minutia involved with filing business taxes.
Advantages of Hiring a Professional Tax Preparer
Hiring a professional tax preparer can be a great way for any business owner to save money, time, and stress. They can help you find deductions or tax credits you may have missed and answer any questions you may have about the tax code. In many cases, a tax preparer can look for deductions and credits specific to your industry and make a business owner aware of other deductions and credits that could benefit their business.
Tax preparers can also help you plan for the future with money-saving tax strategies. This means that they can keep a business owner apprised of upcoming changes to the tax code that has the potential to cost money and assist with strategies to mitigate these costs. In other cases, a tax preparer can suggest how to time major purchases or hire employees to maximize tax savings.
Of course, tax preparers can review a company’s past returns to ensure that no deductions were missed and that all of the information reported was accurate. If a business gets audited or the IRS starts asking questions, a tax professional will know how to handle it.
Tax preparers have worked with state, local, and federal tax codes for decades. While it can often be difficult for a business owner to hire someone else to handle this aspect of their company, many of them are happy with the decision. In many cases, business owners discover that the money they save on tax deductions and credits more than pays for the nominal fees charged by these professionals.
What to Look for in a Tax Preparer
Once a business owner has decided to hire a tax preparer, often their next question is how to find the right tax preparer. Every business is different, so we encourage business owners to ask these questions when talking to tax professionals to ensure they find the one that is right for them.
What qualifications should a tax preparer have?
A tax preparer can prepare tax returns for payment if they have a Preparer Tax Identification Number (PTIN). However, their skills, education, and expertise vary widely. Find out about tax preparers’ credentials and qualifications by asking them about their training and experience. Specifically, ask about their experience with businesses similar to yours.
What kind of tax preparer does my business need?
While almost any tax preparer might be technically qualified to work with your business, looking for a professional with some experience in your industry and/or with your particular issues is likely a good idea. For example, if the IRS has previously audited you, it is probably a good idea to find a preparer with audit experience. Similarly, companies dealing with fines from the IRS may want to look for a preparer who has experience with this and the type of issues that got the company into trouble in the first place.
How much information will I need to give my tax preparer?
While some business owners have no problem handing over their books, others have legitimate concerns about client or vendor confidentiality. If this is the case for your business, discuss these issues with any potential tax preparer before hiring them!
At Nine Line Accounting, our staff has worked with a variety of companies that have many different policies and procedures in place when it comes to confidentiality. That’s why our staff is always happy to take the time to work with you and your staff to ensure that all information is handled correctly.
How much time does a tax preparer need?
The answer to this question will depend a lot on the complexity of the business and how the books are organized. Be honest with potential preparers about your accounting procedures to ascertain if they can get your taxes done in the timeframe you need. Remember that true professionals are used to seeing a range of bookkeeping practices, from start-ups with very lax accounting standards to established financial institutions with very organized books.
The ideal preparer for your business will not shy away from the current method that you are using, although it is very likely that they will make suggestions to improve your bookkeeping practices.
If you think it’s time for your business to hire a professional tax preparer, visit us at Nine Line Accounting. Our staff has years of experience in helping our clients ensure that their taxes are accurate while also helping get them all the deductions and credits they deserve.