A Business Tax Accountant Can be Your Partner in Success
If you are a small business owner, you are part of the backbone of the U.S. economy. It is hard and long work to manage a business in today’s economy. You may be a sole proprietorship, or a partnership or LLC, Limited Liability Company, that has elected to be a pass-through entity. Most businesses in these categories are closely-held with one or just a few owners.
First you work to maximize your profits in business through careful management of income and expenses. If you do your many tasks well, your business books profits. You have worked hard for these profits, and they pass through to the owners’ personal tax returns. However, you may be giving the government more money than you should through business activities even before it moves into your personal tax situation. You could minimize the taxable income in various ways, but the best way to be certain to not miss any opportunities to save money is to consult with a business tax accountant.
Your business tax accountant can become your partner in business profits and tax minimization in several ways, including:
- Categorization of income and expenses is important, as the IRS computers analyze business returns for out of the normal income or expense totals when comparing your business to other similar businesses. Should one of your expense categories be well outside the norm, you just may receive a letter with questions as to why. Your business tax accountant can advise your bookkeeper on proper categorization of expenses to avoid grouping expenses that result in audit triggers.
- Your business tax accountant is your guide in making important decisions involving large expenditures for facilities or equipment. When you buy, whether to lease or purchase, and how to depreciate all influence your tax liability. Advice before you make the decision can save you a lot of tax dollars over time.
- Planning for growth and personnel decisions are an area where your business tax accountant can save you a lot of money as well. When it is time to hire, whether to use employees or independent contractor freelancers, and how to structure compensation are all areas where the right guidance can cut your tax burden.
- Retirement planning is an area where the tax burden of a business can be reduced significantly while providing for retirement income for owners and employees. Proper structure of IRS-qualified retirement accounts can result in deductions for business contributions and tax-free growth of assets in the accounts.
- Another major value of a business tax accountant has to do with IRS scrutiny. Constant monitoring of the accounting function by an accountant is important for audit avoidance. However, no matter how well it is done, there can come a time when a letter from the IRS questions something, or worse, starts an audit. An appropriately licensed tax professional can represent you in front of the IRS. Often, just the answer to an IRS question from an appropriately licensed tax professional can stop an inquisition.
Consider working with a business tax accountant as an important business and personal tax asset for present and future financial success.