Are You Missing Something From Your Current Accounting and Tax Teams?
Searches for accounting and tax help are big online. Those doing the searches often have differing ideas of just what a tax preparer does. The limited or focused services viewpoint is that the firm consults with clients, gives them advice on tax related strategies, and in some cases, they also prepare the tax returns.
Bookkeeping: Often the bookkeeping function of accounting is performed by others, either employees or hired bookkeeping companies. They gather, post, and keep the records of all financial transactions. Income, expenses, and other tax-related transactions are recorded for documentation of activities to back up the tax returns. The team will include bookkeeping in their services, as it keeps a “chain of custody” so to speak of the financial transactions and how they were posted and categorized.
Tax preparation: Rather than just reviewing tax returns prepared by others, the team will prepare the returns. This keeps the process chain going that assures the ability of the firm to justify actions to the IRS should there be questions.
Tax planning: Remember the old saying that “the only sure things are death and taxes.” Business taxes are forever, so planning is critical for future events, rules changes, and tax consequences of business and personal actions. The team works with the business owner(s) to plan for future events and create tax strategies for the legal minimization of taxes paid.
Audit response and representation: By keeping every step of the record keeping through tax preparation under one roof, the team has all the information under its control. The training to become an appropriately licensed tax professional, such as an Enrolled Agent, means that the tax professional has the information in hand about what the IRS expects and what they have done regarding your returns. This means that your risk of audit is reduced, but should the IRS have questions, your tax professional is ready with end-to-end answers.
Business entity decisions: How you classify your business entity has liability considerations, but also major tax consequences. Your tax team can help you consider the best entity structure for your business and personal needs:
- Sole proprietorship
- Limited Liability Company
The structure can also change as your business grows.
Estate Planning: As you grow your business and your personal assets, your tax team can work with you to set up your estate for the future, from retirement planning through the possibility of your incapacitation and the eventual distribution to your heirs.
Asset protection: It is an unfortunate fact that the more assets you accumulate, the bigger the threats to your assets can become. Your tax team provides ongoing asset protection advice and planning, including liability protection and financial strategies to protect the value of your assets.
Your accounting and tax teams should be a one-stop resource for the financial success of your business.