As a small business owner, realizing profits is a top priority. You are always looking for ways to cut expenses. As a cost-cutting measure, many small business managers avoid hiring accountants. These managers figure that they can handle the financial paperwork without any trouble.
Unfortunately, in the long run, not hiring an accountant can be costly. Small business accountants do not just fill and file forms. A good accountant will help you grow your business by providing valuable information on strategic financial planning. Professionals will also manage your tax return account and save you lots of money in taxes.
In this article, we look at several reasons why you should hire a small business and tax return accountant.
But first here’s an important question.
How much will an accountant charge to do my business tax returns and personal tax return services?
Tax preparation prices vary by region, depending on the size of a business and the number of services that will be required.
Most tax preparers will give you a customized quote.
According to SCORE.org, a small business nonprofit organization, small business owners spend $1000 to $5000 on accounting costs.
According to the National Society of Accountants, for the 2018-2019 tax season, the average cost of having an accountant prepare a federal Form 1040 income tax return was about $200 for the most straightforward returns.
Here are the benefits of hiring a small business accountant
1. You save time and money
It’s no secret that filing tax returns can be a tedious and time-consuming process. Trying to beat the deadlines and file accurate returns can leave many small business owners stressed out. By hiring an accountant, you can have more time to concentrate on your business.
Tax advisory accountants will ensure that you don’t miss any tax return deadlines so that you can avoid penalties. Plus, they will check all your documents to ensure that your returns are accurate. You can avoid refilling taxes because of errors in your forms.
You can try tracking how much time you spend filing and keeping track of your tax returns. Compare the time spent with your hourly rate. Check how much you would spend on an accountant per month. Most often than not, it is cheaper to hire a professional to handle your taxes and compliance issues.
2. Reduce your tax liability
As your business grows, you’ll want to reduce your tax liability. A professional accountant will advise you on how to run your business in the most tax-efficient way so you can save money.
You’ll need to learn how to maximize your tax deductions. This will involve keeping track of every single expense throughout the year so that you can identify potential deductions. Without an accountant, it’s challenging to track and account for the essential things like depreciation and out-of-pocket expenses. Accountants will help you strategically plan for year-end deductions.
Because of their in-depth knowledge of the tax regulations, accountants will help you work out tax-saving strategies. Such strategies include timing income to lower taxes, tax credits, and funding pension plans. With a good accountant, you can take advantage of tax law changes.
3. You get strategic financial advice
Apart from offering tax compliance services, a professional accountant will give strategic advisory services to help you make critical financial decisions for your business. You can consult them before investing in high-value assets. They will advise you about the implications of hiring more employees. Accountants will also help you with budgeting and monitoring cash flow. Plus, you will get advice on the best legal structure for your business.
4. You will plan for the Future
Building a sustainable business is not an easy task. You need to take the time to plan for the future of your business. Unfortunately, day-to-day business operations can keep you preoccupied. An accountant can look at the big picture and help you set financial goals to grow your business.
By examining your financial data and records, accountants will advise you on how to stay viable and competitive. You’ll know when to buy inventory. You can determine the best time to make big investments.
You don’t have to be alone at the end of the year trying to make sense of a pile of invoices and receipts. You can partner with an accountant who will provide expert guidance on your finances so that you can build a successful business.