Small business owners have plenty to worry about between sales, employees, vendors and competitors. However, finances are among their top concerns. It can be time consuming to track incoming and outgoing cash flow. Moreover, small business owners need to monitor their profits on a regular basis. With so much time and resources going towards the business and profitability, you can forget about preparing for taxes easily. Around the world, especially in the US and UK, there have been thousands of business closures. Burdensome tax payments are one of the major reasons for failed businesses. In order to pay taxes on time, accountants can provide much needed assistance to small business owners.
Should You Use An Accountant?
Every small business owner should pay taxes on profits. Otherwise, you could run the risk of an audit from the IRS or local comptroller tax office. The decision to use an accountant to depends on your time and resources available. Since everyone calculates taxes differently, you can either learn about the intricate details about the tax system, prepare your taxes using software or hire an accountant to prepare those documents on your behalf. On your own, it will take plenty of time and energy to learn all the rules of the tax code. Meanwhile, a tax software can help with the possible deductions and credits available. Finally, an accountant will require the least preparation and time.
Preparing Taxes Yourself
Of course, plenty of business owners prepare taxes themselves. Especially if you are in the financial services or investment industries, you might have a strong sense of your tax obligations. Investment bankers and professionals who trade forex are more likely to prepare their own financial data because of their familiarity with other statements. Moreover, these types of investing businesses have far less deductions. This simplifies the tax filing process. When the filing is straight forward, you can save money on the additional costs of hiring an accountant. However, you still risk missing out on new opportunities for tax deductions or savings.
Hiring An Accountant For Taxes
If you decide to hire your own accountant, you have peace of mind that your return will be completed in a professional manner. Assuming the accountant is competent, your tax filing will meet the highest standards, maximizing your deductions on all your purchasing and procurement. Ideally, the accountant would be able to gather all of your business’s financial data and produce an accurate filing, saving you plenty of time. However, you would have to give the accountant full access to view your bank accounts and expenses. This requires a high level of trust for business owners. Once the trust is established, they will provide you all the details to minimize your tax liability.
Signing Up For Tax Software
As an compromise, you can sign up for tax software that gives you guidance on filing your taxes correctly. The software offers support to breakdown expenses into deductions. It will recommend what purchases to write off. Additionally, it can automatically check that you are in the correct tax bracket and payment structure. Then, if you still want to have your taxes reviewed, they offer a premium review by an accountant. For business owners who want to save money on an accountant and do taxes themselves, buying software could be a great option.
Depending on your business industry and skill set, it is certainly worthwhile to hire an accountant. If you are financially detailed, you might want to file family business taxes yourself. For business owners that are somewhere in between, check out tax preparation software to maximize deductions while saving on accounting fees. Certainly, if you don’t have the time, you can put your resources towards a worthwhile accountant.