A Suite of Small Business Tax Preparation Services
Small business tax preparation services, if you take it simply as stated, is usually a once-a-year delivery of your financial data to a tax preparer for them to do their thing. You send them, on paper or digitally, your income and expense records, as well as any tax-related major purchases or leases during the year. Even personal life changes such as marriage or divorce can have tax consequences.
This standard once-a-year activity can be causing you to hand over much more of your hard earned profits to the IRS than necessary. Though it may seem cost effective to do your own bookkeeping or have an employee do it, there are other services that a full service firm can do as well as being your small business tax preparation service. Taking advantage of all these services can save far more money than the increased cost of the suite of services.
Starting off there should be a discussion of what your business does and sells in the context of the entity structure that will work best for minimizing taxes and lowering liability as well. Getting advice from a CPA or other tax expert is critical for entity structure selection. Whether you end up as a sole proprietor, partnership, limited liability company, or a corporation, you want to do so with expert advice.
If you wait till the end of each year to plan for that year or even the next one, the IRS loves you. Tax planning involves much more than that and a much longer window in time. This is assuming that you intend to grow your business and make it a highly profitable success. Planning can include discussion of changing the tax entity when your business changes or reaches certain points in its growth.
Of course, small business tax return preparation services are important. Incorporating them into a larger entity that handles some or all these other services streamline the process, increase accuracy, and help in avoiding audit situations. When bookkeeping is inhouse with tax preparation, the ledgers are set up just as the preparers want them and based on categorization of income and expenses the IRS prefers.
Audit Avoidance and Representation
As previously mentioned, having the full suite of financial and accounting services working together will generally help the business to avoid audits. However, no matter how well the return is prepared or how accurate the numbers, the IRS just loves to come up with questions or even move to audits that could generate more income for the government. Of course, more for them means less money for you, so work with a company with a CPA authorized by the IRS to work with them on your behalf. Just having a CPA explain the logic process behind how certain accounting entries were chosen can get the IRS off your back.
Taking a short-sighted low budget approach to small business tax preparation services can boomerang on you and cost you much more money over the years and even in retirement.