Running a small or medium business is all-consuming. No matter how hard you work, your to-do list never seems to get shorter. As the tax season ramps up, you start to think about filing, deductions, and tax laws. If you’re like most other people, these thoughts make your head spin. Filing your personal taxes is one thing, but small and medium-business taxes require a lot more knowledge to get them prepared correctly. This makes it essential that you find a professional tax preparer. Here are some things to consider how to choose a tax preparer for your SMB:
Benefits of Hiring a Professional Tax Preparer for Your Business
If your car starts making a funny noise, you take it to a mechanic. Sure, you could pop the hood and poke around, but you know a mechanic has the skills and tools to quickly repair your car. This is the same reason that you need a tax preparer for your company’s taxes. Here are a few of the benefits for your business:
- Save money: a tax preparer knows about deductions that you don’t.
- Save time: you hand over your receipts, bank information, and accounts and then you’re free to get back to work growing your business.
- Avoid the hassle: Preparing your tax filing is a lot of work and aggravation. You want someone else to handle this arduous task.
- Peace of mind: Were you really allowed to take that deduction? Yes, if you had a professional tax preparer handle, you know that your taxes were filed correctly, and you have a lower risk of an audit.
- An advocate: There is no way to audit-proof your taxes. The Internal Revenue Service (IRS) audits who they please, but if you use a professional tax preparer, they should be your advocate during the audit.
You want to spend your time growing your business and not becoming an expert in tax law. This makes finding the right tax preparer for your business a must.
Tips for Choosing a Tax Preparer for Your SMB
Hiring a tax preparer isn’t as easy as calling for take-out. You need to do some research and find the perfect fit for your small or medium-sized business. Here are a few tips for finding the right professional:
1. Find someone who specializes in SMB tax preparation
When you break your arm, you don’t schedule an appointment with your child’s pediatrician. You call an orthopedic. This is because specialization matters. You may already have a person or company who prepares your personal taxes, but you want to find someone who specializes in preparing taxes for small businesses.
This person or firm will understand your unique needs and expenditures as an SMB. From deductions to amortization, a tax preparer for SMBs knows all the most current laws for your business. These professionals have extensive experience dealing with taxes from other businesses similar to yours. They’ll understand the best way to minimize your tax bill while staying within the federal and state tax laws. Your personal tax preparer or a general accounting firm simply doesn’t have the experience necessary to do the job correctly.
2. Talk to other business owners
As a small or medium-sized business owner, you probably attend meetings or conferences with people in similar circumstances even if it’s a social gathering of local business owners. Ask around. Find out who other business owners, even competitors, are using to handle their business taxes. You may find several professional tax preparers to consider.
You may also discover that there’s a single firm of tax preparers that other business owners are using. The occasional horror story may arise from people who tried to handle their business taxes themselves or hired the wrong firm. While you may be in competition with other business owners, you can always use them as a source of information, such as finding the right tax preparer for your SMB.
3. Interview any prospective tax preparers or accounting firms
You wouldn’t hire a new employee over the phone after two minutes of talking, and you shouldn’t hire a tax preparer this way either. You need to arrange to interview a few different tax preparers. Create a list of questions before the interview. During your meeting with the prospective tax professional, make sure that you get through answers to your questions and that you’re satisfied with the information without further clarification.
It’s always a good idea to take notes during this interview process. You want to be able to go back and review how each person answered each question. You also want to feel confident with your choice of a tax preparer, and this in-person interview allows you the chance to get a sense of the person.
4. Make sure they’ll stand with you during an audit
This is almost like a satisfaction guarantee. You want your tax preparer to stand beside you during any audit by the IRS. This should be the first question in your interview. If you’re ever audited by the IRS, you want the person who prepared your taxes to show up for every meeting and explain why each deduction was taken.
The tax preparer understands the tax laws much better than most business owners, so they can better answer any questions that an IRS auditor might have about your tax returns. This should be a deal-breaker for you. If they won’t work with you during an audit, you shouldn’t work with them ever.
5. Ask for references
Just like an interview, you wouldn’t hire an employee without references. Of course, they’ll only provide you with people who have positive things to say about their services, but it’s important to know that they have customers willing to do that.
Some tax preparers might have letters of reference or provide you with contact information. If you can contact other customers, it’s a good idea to do so. The person may provide you with a perspective that you haven’t considered.
At Avitus Group, we understand all the ins and outs of tax laws affecting SMBs, Contact us today to get help with your business taxes and tax planning.