Does Your Small Business Need a Tax Professional?
February 15, 2018
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“Tax season is my favorite time of year,” said nobody ever in the history of small businesses. Every business owner knows the headache that comes with digging up year-old bills and poring over endless forms, wondering what to put where.
If you’re dreading the experience and need a little help, check out our blog 6 Tips for Small Businesses on Surviving Tax Season.
But what if you need a little more help? Should you hire a tax advisor to lend you a hand with your tax return?
There are both pros and cons for asking for help from a tax professional
There are both pros and cons for asking for help from a tax professional. The pros are obvious: somebody will do your taxes for you. But so are the cons: you need to share sensitive information about your small business with your advisor, not to mention the fees you’ll have to pay them.
So what’s the way forward? Since every small business is different, there’s no uniform answer that fits every case. However, here’s the rule of thumb that can help you decide.
If your business is really small (a sole proprietorship or a single member LLC), and you don’t have significant costs of goods sold, or depreciating assets to report, you should do your taxes by yourself.\
If your business is really small (a sole proprietorship or a single member LLC), and you don’t have significant costs of goods sold, or depreciating assets to report, you should do your taxes by yourself.
However, if your business is more complicated (or you’re really bad at paperwork) then the cost of time spent doing your taxes would surpass the cost of hiring a tax advisor. Not to mention the fees you’d have to pay if you made a mistake.
Who Can Help You With Your Taxes?
There’s a simple answer to that: anybody. If your best friend/brother-in-law is really adept at doing taxes, then by all means, go for it.
However, if you don’t have a self-appointed tax expert up your sleeve, or you need someone who can represent your business before the IRS, then you need to choose a professional.
A professional tax advisor is a person who has a certification in finance and taxes
A professional tax advisor is a person who has a certification in finance and taxes (for example, a financial degree or a training diploma for tax regulations) that allows them to advertise their services to the public.
What Kind of Tax Advisors Are Available?
There are three main types of professionals recognized by the IRS as tax advisors.
1. A Certified Public Accountant (CPA).
CPAs (not to be confused with regular accountants) have passed a state licence exam to earn their certificate.
2. A Tax Attorney.
It’s best to pick a person specializing in business taxes, not just personal taxes.
3. An Enrolled Agent.
Enrolled agents are allowed to represent your business before the IRS. (However, if you need to take your case to a Tax Court, an enrolled agent won’t be able to help you any more.)
What Sort of Help Can You Expect?
Besides the obvious (preparing your tax returns), tax advisors can help you in many other ways.
When preparing for tax season, your advisor can assist in planning your taxes, including advice on minimizing the eventual taxes your business will have to pay.
When preparing for tax season, your advisor can assist in planning your taxes, including advice on minimizing the eventual taxes your business will have to pay
Your tax advisor is the go-to person for any tax related question throughout the year. And, if you get an audit from the IRS, your tax advisor can help you with your preparations, and even represent you before the IRS.
Employing the services of a tax advisor can save you time, money, and a headache. As a busy small business owner, you need all the help you can get so you can focus on your real passion: developing your business.
Luckily, there are services that can take various necessary business tasks off your shoulders. Take Veem, for example.
Veem can take care of all your international B2B payments. With just a click of your mouse, you can send or request payments from all over the globe. Veem is quicker, safer, and cheaper than your bank. How so?
Veem creates a direct connection between sender and receiver. This means that there are no middlemen, no hidden fees, and no unexpected delays in the process.
In addition, Veem charges no wire fees and offers favorable foreign exchange rates. You can even track all your transactions on your personal dashboard.
What’s not to love?
Sign up for a free Veem account and enjoy easy international payments.
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