Every accountant will tell you their busiest season is tax season. As many of us wind down the year and start gathering paperwork to start our taxes, accountants are firing up their engines on all cylinders. They are poised and ready to start tax forms for their clients. They will go full steam ahead until April. If you are like a lot of startups and small businesses, you might have done your taxes by yourself, thinking it would save you a bit of money. Perhaps you did your taxes last year because you waited till the last minute. Whatever the excuse is, small businesses need accountants for tax season and many other reasons that span the entire year.
What is it like for you to get your act together to get your taxes done? The answer to that question, of course, lies in how organized you are daily. For the entrepreneur or small business owner who has not been diligent in keeping receipts and statements in an organized fashion for later use, getting things together for tax preparation is a nightmare.
What kinds of things would a good accountant tell a small business about getting organized? Well, they would likely recommend a number of things. Letâ€™s take a look at a few.
Small Businesses Need Accountants To Avoid Audits Later
Using an accountant is not going to guarantee the IRS will not audit you. However, a good accountant will undoubtedly know what to avoid. Many small business owners find themselves in trouble with the IRS over everyday things they do with money, simply because they didnâ€™t know better.
The IRS makes no leniency for failing to educate yourself. A good accountant knows what common mistakes small business owners make so they can do a better job of keeping track of expenses, according to the IRS.
Good accountants know what you can and cannot count as a tax-deductible business expense. It may have served you in pressing the envelope with expenses before, but that doesnâ€™t mean the IRS wonâ€™t show up one day. You need to know ahead of time what you canâ€™t deduct. This might save you in the long run in making investments and incurring expenses you donâ€™t need to if you canâ€™t claim them as a deduction.
Another good reason to seek out an accountant before doing your taxes is all the little things they know about filing taxes that can save you money. Accountants know how to help you increase the deductions that chances are you are not aware of. You can trust a CPA to help you understand what your business qualifies for better than you can.
Small Business Owners Should Talk To An Accountant Before Filing Their Corporate Status
The three common types of corporate status options that small business owners and startup founders choose will fall into three categories:
- S Corporation
- C Corporation
- LLC Filing
You shouldnâ€™t just pick one or decide which corporate status is right for you based on what a friend either did or said. There are many bad reasons to go with the wrong filing. The IRS has strict requirements on what kind of business qualifies for which type of corporate filing. A good accountant will direct you on which one would best suit your needs before you file. Changing your corporate status after the fact is a messy and lengthy process that should be avoided at all costs. This is just one of the many reasons small businesses need accountants to help them set up for success before they are even open for business.
Good Accountants Know What Technology And Services Will Save On Money And Time
Since accountants know how to budget and financially plan for the success of a small business, they know what kinds of goods and services would be best for your company to use. Accountants regularly recommend:
- Accounting Software
- Budgeting And Forecasting Tools
- Insurance Agents
You might not have thought of an accountant as being your partner in business, but many accountants have a lot of experience in dealing with these kinds of services. They can pass useful information on to their small businesses owners and talk in detail about when and why they would be suitable for your business to use.
Good accountants regularly recommend PEOs to small business owners who are looking for an HR Service partner to help with HR management, and benefits and insurance. PEOs take much financial risk of the plate of a small business owner who has employees. PEOs can save you a lot more on the expense of benefits and health insurance than other types of coverage. If you havenâ€™t asked your accountant about working with a PEO, contact us today for information on whether or not a PEO would be right for your business.