In case you haven’t already hired a professional tax preparer, or you’re on the fence about it, here are five reasons why I think you should do so.
Note that by “professional” I don’t mean the good folks at H&R Block or Liberty Tax. There’s nothing wrong with them, but many of the employees there tend to be kind of temporary and transient.
I mean you should consider hiring a professional with whom you can establish a long-term relationship, and here’s why I think it’s important:
1. You’ll save money.
Hiring a tax pro will almost surely save you money in the form of missed deductions and credits. (Your CPA can also help you avoid penalties and interest because — OOPS! — you forgot the corporate tax deadline is March 15th, not April 15th.)
A colleague of mine once said, “There should be a law which states that all Americans must have their taxes prepared by a professional.” She didn’t say this because she’s greedy. She said it because after ten years of tax prep experience, she’s seen over and over the errors made by well-meaning people which aren’t often discovered by consumer tax software.
Do you know how to deduct the start-up expenses for your new restaurant?
Do you know how to figure out and substantiate your home office deduction?
Isn’t there a chance that by not knowing these
absurdly difficult details intricacies, you’ll make a mistake that costs you money?
Last I checked, Turbo Tax for small business owners starts at $75, and it frankly doesn’t do a super awesome job of guiding taxpayers through these and many other questions. The additional cost of paying a CPA to prepare your tax return is a worthy investment in your peace of mind.
2. You’ll save time.
Really, who wants to spend hours doing their own taxes?
Who knows how to figure out S-corporation shareholder basis?
Who dreams of deciding whether to depreciate or expense their new computer?
Unlike money, our time on the planet is precious and limited. Interpreting the Internal Revenue Code is stressful enough for those of us who do it for a living.
Wouldn’t you rather give those tedious back-end tasks to a CPA, so you can spend your time working on your business or doing something you enjoy?
3. You can develop a relationship with a knowledgeable adviser.
Accountants are usually great business and financial advisers — especially ones like me. Unlike certain bean counters who have worked in tax all their lives, I actually have small business experience and business is my passion. I’ve worked in a variety of different industries; managed a 40-employee, $3,500,000 retail operation; and run my own investment advisory firm.
I know a thing or two about running a small business, and I love to share what I know.
Your CPA also acts as a “checks and balances” to your banker, mortgage broker, financial adviser, or realtor — any of whom may not have your best interests at heart, depending upon how they’re compensated.
Even if your trusted financial adviser is your dad, it’s still a good idea to get a second opinion on your investments and your business ideas.
4. You’ll appear more confident in your business.
Having an accountant makes you appear more like a successful, important, business-savvy person.
I’m all for Do-It-Yourself, but honestly — real businesses retain the services of a professional business adviser. It shows the world that you take your business seriously.
5. Your IRS issues (should they occur) will be made much easier.
Though it’s critical to actually read the notice you receive from the IRS, after you’ve read it, simply give it to me and I’ll take care of it. (That is, of course, if you’ve declared me as your representative.)
But giving the notice to me doesn’t absolve you of your responsibility. It simply means that if the thought of corresponding with the IRS scares the daylights out of you, you have someone who will do it for you.
Over and over again I hear from my clients and friends how it’s been worth it for them personally and professionally to work with a CPA. Other times I hear, “I wish I’d hired a CPA earlier.” (Often accompanied by a heavy sigh.)
If you’re starting a new business, definitely hire an accountant. If you’ve been operating your business for awhile without the advice of a CPA, it’s never too late to start a relationship with one. Or if you’re simply someone who hates numbers, there are plenty of people out there who want to help you. And I’m one of them. 🙂