Are Accounting & Tax Services Worth the Cost?
To answer the title’s question, are accountant tax services worth the cost, one major assumption will guide the evaluation process. That is the assumption that when you look for accountant tax services, you are seeking a package or suite of services that cover the range of challenges the small business faces when trying to maximize profits while minimizing taxes.
These services do not just cover daily business practices and decisions, but also decisions with results that spill over into the personal lives and taxes of the owners. Taxes are complicated for all businesses and super complicated for some types of business. The key to selecting accountant tax services is to consider them a partner of sorts in your success. When they are doing their job well, advising and not just filling out returns, you will put more money in your pocket and less in the pocket of the IRS.
The Business Cleanup
Often the small business owner starts thinking about accountant tax services when they find that their business taxes are a mess. Even if they are somewhat organized, they may believe that there is money going out in taxes unnecessarily. You want qualified accounting personnel to go over your books and returns for at least the previous year or two, locating issues and setting up a proper chart of accounts to put you on the right track.
Business Entity Formation
If yours is a new business, you should consult with a tax professional about the best tax entity formation for your business type and the owner(s) involved. This decision between a sole proprietorship, partnership, S-Corporation, LLC, or corporation can make a huge difference going forward.
Once your books are in order and your income and expense accounts are properly categorized, the bookkeeping function can accurately and efficiently keep your books. Improper categorized expenses can bring on unwanted IRS scrutiny, especially when some categories show expenses significantly higher than the same categories of businesses like yours.
Taxes do not just jump out of the woodwork at the end of each business year. Thinking like that can cost you a ton of money over time. There are decisions in the growth of a business that involve real estate, major equipment, employee hiring, and retirement planning. These should not be made in an annual manner, instead they should be planned for the best results.
With all this prior planning and organization, tax return preparation is still not a slam dunk. Each year there are major and minor changes by the IRS that can mean changes in the preparation of the return. The accountant tax service that has experts on staff will make sure that the return documents are properly completed according to current regulations.
Audit Avoidance and Response
As already mentioned, staying on the right side of the IRS can help you to avoid unwanted scrutiny and a possible audit. However, no matter how well things are organized and done, the IRS computers can flag your return for questions.
If that “accountant tax services” search has been on your mind, consider making sure that you are getting all the services.