When to Bring in the Tax Pros

May 04, 2020 by First Federal Bank

Tax Pros(2)Having a professional tax advisor in your corner can help you cut through the dense thicket of paperwork, letting you focus more of your attention and energies where needed.

Tax season can bring a whole mountain of stress, particularly if you’re the proprietor of a small business. Having a professional tax advisor in your corner can help you cut through the dense thicket of paperwork, letting you focus more of your attention and energies where needed.

Rely on expertise

When you operate your own business, you have to wear many hats, so it stands to reason that tax preparation would be one of those caps that you wear when needed. As Jean Murray of The Balance Small Business points out, hiring a professional tax advisor like a certified public accountant means that you’ll have someone keeping their eye on your taxes all year long.

The expense of paying a CPA may well be worth it for the reduction in stress alone, but it can also pay out in terms of tax breaks. Murray notes that a tax advisor can provide legit, legal strategies to minimize your tax burden and increase the number of breaks — in her words, a good tax advisor will play offense in seeking out ways to save you money. They’ll also take care to organize and store all pertinent paperwork, which gives you one less thing to have to worry about outside of tax time.

What’s more, according to Murray, a professional tax advisor will remain abreast of changes to the tax laws like the Tax Cuts and Jobs Act. Because they know these changes exist and understand how they affect your business, you stand a better chance with a tax professional to come out ahead. And a CPA or enrolled agent is licensed and qualified for the particular job at hand, so they can represent you in the event that you are audited by the Internal Revenue Service.

Focus on your business

Taking on roles that might belong to dedicated specialists in larger companies is not uncommon when you run a small business. But as Tanza Loudenback writes for Business Insider, determining whether it’s time to hire a tax professional comes down to asking yourself a series of simple questions.

The first is whether you have the time or patience available to spend the average 20 hours that the IRS and National Association of Tax Professionals say you’ll need to pull together your documents and prepare the taxes. If your level of involvement in your business will not allow you to devote that much time to the task or would see you interrupted several times during the process, you’ll likely be better off hiring a professional.

Being uncomfortable with the mountainous task of preparing and filing taxes is also a major determining factor — Loudenback says uncertainty with your ability to do the task correctly should push you toward hiring a pro. If you do feel confident but have unique circumstances like deductions for home office use, business vehicles, meals and travel and other deductions, Loudenback says you may still be better served by a trusted professional.

Taxes are one of the things you absolutely have to get right for the success and longevity of your business. Hiring a professional tax advisor to get them done correctly, quickly and without any stress on your part may be one of the best investments you will ever make as a business-owner.

Categories: Taxes