Tax Return Preparation Services for a Successful Business
Starting around the first of every year, you get inundated with TV and other advertising for tax return preparation services. As filing small business taxes gets more complicated every year, tax return preparation services are in demand. Many of the ads push the low cost approach, some claiming larger refunds for personal returns. The small business owner needs more in the way of tax return preparation services and cost should be low on the list of selection criteria.
The simple approach could be what one freelancer does each year. He keeps expense and income spreadsheets and just sends them to his provider of tax return preparation services. It is simple, but not like you’d think. His preparer is licensed and approved to represent him in IRS actions and audits.
Though it seems like a once-a-year simple and quick interaction, it is far more than that. By using an appropriately licensed tax preparer, this freelancer has had the appropriate discussions with them about the nature of his business, what small business tax deductions he can take, and any special care he should take in record keeping to avoid problems with the IRS. If the tax preparer sees an expense category that seems out of the norm on those spreadsheets, the freelancer gets an email or phone call, and they get it hashed out. This helps to avoid a question, or worse an audit, from the IRS.
This freelancer’s business is possibly the simplest type of small business, and your business is likely much more complicated when it comes to tax strategies. Working with licensed tax preparer, such as an Enrolled Agent, is advisable if you want to concentrate on maximizing your business profitability with a licensed tax preparer backing you up to minimize how much of that profit the IRS takes.
This relationship with a licensed tax preparer offers many more benefits and a la carte services for business success. One of the most valuable is in tax planning and how to structure your business to minimize taxes. Just taking advantage of their help in setting up systems to capture all legitimate expenses can save a chunk of money in administrative time and in avoidance of errors.
Especially when it comes to taking home office and business use of personal vehicles expense deductions, the help of an appropriately licensed tax preparer can keep you out of trouble with these two audit targets. Unfortunately, some small business owners have read that these are targets for audits, so they simply avoid those expense deduction categories. This leaves a ton of money on the table, over the years, far more than the advice of the tax professional would have cost.
If you have been considering consulting with a tax professional, any time of the year is a good time. You get help in taking advantage of tax minimization for the rest of that tax year and future years too. Our freelancer above moved to a different state but is still using the same tax professional for more than a decade of excellent tax return preparation services.