5 Reasons You Should Hire an Accountant to Help with Your Small Business Taxes this Year
Wednesday, April 21, 2021
Understanding your tax liability as a small business and ensuring you file everything properly and on time can be a headache. If you’ve just recently started a small business in the last year, you might not be totally ready for the complications involved.
Tax law is complex, and the IRS puts a lot of restrictions on how small businesses file and what sort of documentation they need for filing. This can be a lot for a business with only a few employees to handle.
At the same time, there are countless deductions and credits available based on business expenses that will let you pay less. The problem is that you can’t take advantage of them if you don’t know about them.
Hiring an accountant, whether as an individual or as a part of a larger external organization, can give your business an edge and ensure that you’re able to file your taxes completely and efficiently without spending any more than is absolutely necessary. You don’t want to overpay, but you don’t want the IRS to come back later and fine you for money you failed to pay at first.
Tax Expertise Saves You Money
The number one reason small businesses hire accountants or outsource their bookkeeping for tax season is because accountants can save you money. The tax system is complex, and it takes time and experience for someone to learn how it works.
When you hire a tax professional, you’re getting someone who has helped out plenty of businesses like yours with their taxes. They know how it’s done and they know how to minimize your liability and maximize your possible refund.
According to a survey of roughly 400 small businesses in the United States, 52% believed that they overpay in taxes each year. But according to that same survey, accountants are the most important professionals for small businesses – ahead of attorneys – and an average 67% of small businesses are satisfied or very satisfied with their accountants.
While you might be able to get your taxes done on your own without any help, you’ll never know how much money you’re leaving on the table. An accountant will have the knowledge and expertise to ensure you’re not overpaying, and that you’re claiming all the deductions you deserve.
You’re Paying for Efficiency
Think about it. If you decide to do it yourself, or you give the task of handling your taxes to another employee at your small business, how many hours are going to be spent just learning how things are done? According to recent surveys, it takes small business owners 8.8 hours to prepare and file their taxes. Conversely, it takes less than 2 for them to get all the paperwork they needed in order and hand it off to an accountant.
You’ll be losing significant company time and money letting people make mistakes and slowly figure out how to file the federal tax return for your business. They may do a spectacular job, but it’s going to take time.
And why decide to do it yourself if it’s not your area of expertise? 60% of small business owners say they aren’t very knowledgeable about accounting. Paying an accountant ensures you get the best service possible, and save the most money.
Bringing in an outside accountant can reduce your cost overall, because this is the primary work they’re trained to do. Accountants will be quick and efficient in determining your tax liability and filing your return before the due date.
Outsourcing finance and accounting services in general can be incredibly cost-effective, simply for the increase in efficiency. The best accountants also have top-of-the-line tools and software that help them streamline the process and get your bookkeeping done in far less time than it would otherwise.
Healthy Businesses Need Good Bookkeeping
Many small businesses don’t worry too much about record-keeping until tax season comes around. You may keep and store all of your receipts and old transaction records, but there’s always more important work to do that keeps you away from the mundane tasks of collecting records in one place, reconciling accounts and everything else involved in bookkeeping.
It’s hard to find time to prioritize bookkeeping for a small business when everyone has their own work to do and there are not any employees who are solely concerned with accounting. Now that some bookkeeping has to happen for tax season already, you have an opportunity to build for future success in your company by investing in accountants that can help you grow your business.
An accountant you only have for tax season can still help shape your work processes to make things run more smoothly in the future. They can help design a system for recording transactions and keeping accounts separate. You might even consider finding an external accountant or program to help you automate other important bookkeeping processes like payroll.
There are also services out there – like us – who offer tax preparation, bookkeeping, and payroll all in one place. That means that the expert who is helping with your bookkeeping will be able to pass your records directly to your accountant, with as little work for you as possible. It saves you the hassle of potentially having to pay for a payroll service, bookkeeper, and accountant, as well as keep track of your documents and ensure everything is in order yourself. That’s more time saved and more peace of mind in knowing that all your back office work is handled by experts.
These efforts will make filing your taxes and getting your refund simple and easy, but they’ll also give you easy access to accurate financial information on your business. The more you know about the current health of your company, the better prepared you are to avoid crises and take advantage of opportunities for growth.
You Have More Important Things to Do
When it comes down to it, the biggest benefit that working with a professional accountant gives you is peace of mind. You know that your record-keeping and tax filing are taken care of, so you have one less thing to worry about.
Instead of having to constantly look over the shoulder over another employee tasked to figure out the process or even take on this burden yourself, you can let the accountant handle everything and report back to you when they’re finished.
As a small business owner, your time is valuable, and you need to be choosing carefully where to focus your energies. With an accountant handling your taxes, you as the owner can focus on the core vision of your business.
The Stakes Are High
No matter what you decide is your best option, the important thing is that your personal taxes and the tax returns for your small business are completed accurately and precisely and turned in on time. It seems like a relatively simple thing, but it’s crucial for keeping your business and in good standing with the IRS.
You don’t want to run into any fees, penalties and interest payments because of problems with your return. Make sure that your filling gets done, and don’t hesitate to seek out professional help if you’re struggling to deal with the complexities or you want to see if you could be saving more money.
Written by Mike Savage, CEO of 1-800Accountant