While the more than 28 million small businesses in the United States represent a wide variety of industries, communities and business models, they all have one thing in common: a responsibility to pay applicable small business taxes. How do you decide whether you're going to do them yourself or hire a tax preparation specialist to file them on your behalf?
Reasons to Do Your Own Small Business Taxes
1. Doing it yourself can save money
If your small business operates on a tight budget, cost considerations may preclude the option of hiring an accountant or tax preparation specialist. Doing them yourself could save your company from a few to several hundred dollars, depending on how complex your taxes are, how many attachments must be filed and so on.
2. Your taxes are simple
If your taxes are fairly straightforward, simple to calculate and don't vary much from year to year, then you might not need to pay someone else to prepare and file them on your behalf.
3. You understand your business best
No one is more familiar with the ins and outs of your small business than you. Explaining your business model and income sources to a tax professional may take longer than doing them yourself, which can also give you the added assurance nothing was missed by someone who isn't familiar with your company.
Reasons to Hire a Tax Preparation and Filing Professional
There are times when it's best to leave the number crunching to a professional. Here are four benefits of hiring someone to do your small business taxes:
1. You don't have the time to do it yourself
Tax preparation can be time-consuming, especially if it's not your area of expertise. As in the case of nearly every business task, when it comes to doing your own small business taxes, you need to determine whether your time is better spent somewhere else. If it is, then delegating tax preparation could be what's best for your company.
2. Hiring a professional reduces the risk of making mistakes
People who have a strong knowledge of the tax code might know of deductions, exemptions and other requirements you might miss if you did your own taxes. Getting those little known decuctions and avoiding costly errors that can occur when doing your own taxes could save your company money — even after you've paid a fee to the tax preparer.
3. Your business and personal taxes are too complex
Even if you have a simple business model, preparing and filing your company's taxes could be confusing, because the tax code is complex. Tax pros have the expertise needed to get the job done right, no matter your situation or the mound of paperwork you've accumulated for your taxes.
4. You're looking for peace of mind
Professionals often guarantee accuracy, so if a mistake is made or you become subject to an audit, they will be there to help you understand the next steps. As a busy business owner, having a tax professional guide you through the process of filing your business taxes can bring the peace of mind you need.
However you decide to handle taxes, it's an important decision. Take time to explore your options early on, so you're ready when tax time rolls around.
This information is only provided for general informational purposes, and should not be considered as offering individualized tax advice. Tax laws are complex; please consult your tax advisor on specific issues related to your tax situation.