Tax season is the one time during the year when people and companies will all be faced with a massive amount of paperwork, whether it’s for our personal taxes or business. How can you make sure that your taxes are filed correctly? For businesses, one way to ensure that you have done everything right is to hire a tax professional. These professionals will be able to help in lots of ways, including finding tax deductions and loopholes available to your business.
Why Should I Hire a Tax Professional?
However, you may be asking yourself ‘why should I hire a tax professional?’ There are many reasons why you should hire a tax professional such as Tri-Merit, but some of the most common are as follows:
1. File for Limited Liability Company or S-Corp
You may be a sole proprietor and want to start your own business. Hiring a full-service CPA firm is not always affordable, so hiring a tax specialist can help take all the guesswork out of the process. Hiring an individual can eliminate these expenses for any single person needing help with their taxes.
2. Select the Right Form of Business Entity
While an S-Corporation is the most popular corporate structure and offers the most tax benefits, an LLC may be better for you depending on your circumstances.
3. Determine the Availability of Certain Tax Deductions
Some companies will be able to take advantage of different opportunities in the tax code that come around every year, but these are usually not available to all businesses. These opportunities fall into a category called “available for all taxpayers” or “available for all businesses.” When you hire a full-service firm, you’ll have someone who can find these little-known deductions and present them to you as options that could save your company money.
4. Government Relations
With the current political landscape in Washington, DC, and policy changes on the horizon, it has become increasingly important for businesses to develop strong relationships with policymakers and political leaders. When this is the case, you’ll need someone who can take care of these matters for you.
5. Planning and Preparation
Full-service firms have experts who will be able to handle every aspect of your business tax preparation or tax planning needs so that you don’t have to do it yourself. You won’t have to worry about gathering vital paperwork and information because your CPA firm will handle all of that for you so that you can focus on other aspects of running your business or personal life during tax season.
6. Accurate Preparation of Financial Statements
Whether you use an Accrual Accounting system or a Cash Accounting system, you’ll want to make sure that your financial statements are prepared accurately so that they represent the financial position of your business at any given time. Accrual accounting is used by most larger businesses because it more closely matches income and expenses and lets you set up tax strategies in advance if there are likely to be changes in the tax code.
7. Professional and Personal Tax Planning
If you hire a full-service firm, they will be able to provide you with the best possible tax advice to maximize your chances of getting a lower tax rate. This won’t only involve business taxes either; if you have personal deductions that can be used to offset taxable income, they’ll be able to help you with that as well.
8. Preparation of Tax Returns and Filing
The whole process of preparing your tax returns can be very tedious, especially if you are the person who is filing the taxes. However, with the help of a full-service firm, you will be able to reduce that amount dramatically. In fact, there are CPA firms that specialize in doing this for their clients and will prepare all your returns for you. The fees for these services are usually quite reasonable, especially when compared to hiring a full-service firm.
9. New Tax Laws
With new laws coming into effect every year, it’s important for tax professionals to know about them and how they can apply them to their clients’ situations.
10. Tax Audits
Every year, the federal government conducts audits of tax returns in the hopes of catching smaller businesses or individuals who may have tried to avoid paying their taxes. If you hire a full-service tax specialist, they will be able to ensure that your firm is properly prepared for any audit by conducting an audit readiness review and preparing all the necessary documentation (which could include direct deposits, as well as receipts for every expenditure you ever made), as well as gathering evidence where necessary so that you do not have to.
The reasons why you should hire a tax professional are numerous and varied.
Since you will be working with a tax professional, you’ll have to do your due diligence to find the right person for the job. Since tax laws are often complex and subject to change, you must find a CPA firm that has a strong understanding of current and future tax changes and can anticipate these changes at no additional cost.
Finding a CPA firm that has experience in your industry can also be very helpful. An experienced tax professional who specializes in your industry will likely have worked with other companies like yours before and may even have experience dealing directly with your industry’s regulatory agencies in addition to knowing current tax laws.
If you are in the market looking for a tax professional, be sure to ask them specific questions about their level of experience with your industry, what experience they have working with companies like yours and what services they can provide you going forward.
When all is said and done, hiring a full-service CPA firm will make your tax season much easier. Sure, many individuals can help you with your taxes, but smaller firms or individual accountants may not be able to offer the same level of expertise and range of services most CPA firms can offer.
Salman Zafar is an acclaimed blogger, editor, publisher and digital marketer. He is the founder of Blogging Hub, a digital publishing portal with wide following across the world.