Tax season is a bane for individuals, but it can be even more complicated and confusing for new business owners who may not be familiar with the tax code as it applies to small businesses. While there are several existing software packages that promise to make the process easier, users still have to put in the time and energy to realize any tax advantages — none of which are guaranteed in the first place. Instead, small businesses that need to file taxes soon should seriously consider using professional tax preparation services. Take a look below at just a few of the reasons why.
While tax planning services aren't given away free of charge, they can actually save your business money in the long term. Many business owners may not have full knowledge of the deductions they are eligible for. These deductions can include — among many others — office supplies, phone and internet services, various types of insurance, bank fees, and even a percentage of business meals. In order to take full advantage of the potential savings each year, contact a tax preparation expert in your area.
When it comes to filing your small business taxes, there are potential mistakes that can be made at every turn. Some common mistakes include over-reporting your business' total revenue, failing to input work vehicle mileage correctly, not making accurate contributions to employee retirement plans, and not staying abreast of recent tax developments that shift your tax burden. Furthermore, the consequences for mistakes made when filing your taxes can be severe and can include hefty fines that will set back your business' bottom line.
Assistance with Audits
Audits are rare, but if your small business is facing one, you should always treat it seriously. Accountants representing a tax preparation service can help with this. Most audits are classified as correspondence audits, in which the Internal Revenue Service will request information or clarification regarding your taxes. Tax planning professionals can help make these requests clearer and locate the requisite information before sending it to the IRS. Field audits are a different type of audit (and are even rarer than correspondence audits), but will most definitely require a tax professional who can act as a source of expert information and unofficial representative of your business's financial interests. Without tax preparation services, you may feel overwhelmed during an audit and accidentally provide inaccurate information that jeopardizes the outcome of the audit itself.