If you’re starting your own business anew, or you’re already working for some time, chances are that you’ve considered hiring a professional accountant, especially if you’ve been doing your own taxes which have easily started to be overwhelming.
Maybe the IRS has contacted you, and you don’t want to do anything wrong (you mustn’t do anything wrong) or you want to make the most of your tax return. Nevertheless, here are some points to consider if you’re doubting whether to get a professional accountant.
Multiple Sources Of Income And Assets
If you have a clear-cut tax situation with no dependents, no investments (retirement accounts are all right), no assets or charitable contributions, if you’re self-employed and bookkeeping oriented yourself – then you’ll probably feel more comfortable doing your own taxes.
But, if you feel that you don’t have enough time and patience to deal with complicated dependents or if you have more assets that take away the energy you can use more efficiently or smartly, somewhere else – then you would need to outsource to help you prepare the taxes.
Types Of Business
Usually having a freelance or retail business, as well as having foreign accounts or investments or actively trading stocks, means that there are more complicated terms of a tax return by the IRS that you need to be familiar with.
Many times small business owners are also perplexed by terms and conditions that make them often turning to professionals. They rely on professional help for at least the first year of owning a business when there are many other things to care about, like securing a steady income and getting recognized on the market.
When contemplating hiring experts, you (and many others as well) might be put away by having to choose the company or the individual to trust upon with something so important that includes law and your financial and life stability.
This reason is actually the first one asked and the most problematic one. While searching for the right accounting companies or individuals, make sure to check if they practice what they preach on their website, for example. Read reviews, ask around about them and search for recommendations and determine what services are the volume of your business going to need.
When Life Happens
You must’ve noticed that when a major life event happens – getting married (or divorced), having a newborn, moving out from your old home and moving into a new one, or even moving to another state (welcome to Florida!), you’re also experiencing lack of time, first, and then energy. The worst thing it can happen is to fall down on doing your taxes. Add to it the stress, anxiety, and the feeling that you’ve done something wrong along the way.
According to the IRS, the average person spends up to seven hours just collecting forms and preparing returns. And as a business owner, prepare to spend an average of 20 hours on these taxing chores. It comes as no surprise then that in 2020, the majority of electronically sent taxes were arranged by professional accountants – over 80.6 million out of 152,802,000 million individual tax returns.
And the number one reason why many of these people hire professional help is because of their experience. You would be hiring someone who has already helped out a good deal of businesses similar to yours. You would be getting someone who knows how it’s done and who understands the language of the IRS, its newest regulations, and how to minimize liabilities and maximize achievable refund.
Expertise and experiences mean that your business will be kept in good standing with the IRS and you don’t have to worry about any fees, penalties, and interest payments because of running late with tax returns or not doing them correctly.
Bookkeeping In Order
Unfortunately, the practice has shown that many businesses, especially small ones, are not keeping their records up to date, meaning that they only worry about having proper bookkeeping and figures when the tax season comes around, again.
If you’re an owner of a small business, and you don’t have enough employees (or you’re the only self-employee) who have enough time and expertise to prioritize dealing with it over other tasks and overall work, you should consider how much less time-consuming and a stress relief would be having the figures in order, other than spending tens of hours only preparing them.
Analyzing And Future Growth
Let’s assume that you’re good with numbers yourself and that you have been doing your own taxing job, but have you thought about what else you can learn from these numbers, overall income, and tax deductions?
A professional accountant can not only prepare these for you but also give you an estimation of your business’s future growth, possibilities for expansion, and further investments; comparison of the quarter and annual analysis and the prediction based on your business’ health. The accountant can help you set up a budget and financial goals, and make reports on fixed and variable costs which altogether gives you a reality of the market conditions and if you are making profitable growth. Sure, doing taxes is one thing, but hopefully not in vain.
Lastly, but not least, an accountant can help you with tax refunds or with deductions, as well.
While you might be able to get your taxes done on your own without any help, as previously said, you won’t know if leaving tax money aside means anything for your business. On the other hand, an accountant will have the knowledge and expertise to ensure you’re not overpaying, for example, and that you’re getting all the possible refunds and deductions you are able to claim.
Whether through investments in stocks, bonds, funds, cryptocurrencies, or real estate – your professional accountant will know how to increase the refund or to make a more strategic tax return.
Depending on your situation, you can likely handle filling simple forms yourself. But, one point is to determine when it might be simple enough, and when you have a more complex tax return situation where a professional accountant might be worthwhile. Another point completely is finding this reputable time and energy saver, and money protector.