As a small business owner, you might be thinking you can handle your own tax preparation. While that’s certainly the case for many companies, it’s not always the best practice for you or your business. Choosing to partner with a CPA firm or business advisor who can handle your accounting and tax planning helps take the pressure off you and enables you to focus on other key aspects of your business.
Just how, exactly, does a CPA handle small business taxes? While the business structure, size, and needs of each client vary, the overall approach is the same. The goal is to deliver sound, strategic advice through an entrepreneurial perspective that benefits businesses and non-profits from a wide range of industries.
Trust is Paramount
The financial aspect of any business comes with its own set of challenges. It can be complicated and convoluted plus tinged with anxiety to manage—and that’s the internal version of it business owners are familiar with. Now add in the extra consideration of trusting an external or third-party source, like a CPA, to manage your finances, and that’s where many businesses choose to keep accounting in-house.
Protecting your information is top priority for CPA firms. Your data and personal identifiable information are part of the secure knowledge needed to be accessed in order to manage your accounting. Firms employ secure transmission methods for sharing data through email servers built for encryption and client portals for uploading and downloading sensitive data.
The Right Fit
Second to trust, expertise and industry familiarity of a CPA will help ensure your business financials are in good hands with someone who knows your business and its valuation. From how your business is structured to its size and visions for the future, a small business-focused CPA will offer invaluable insights into financial management that keeps your business in compliance and poised for success.
Choosing to partner with a tax accountant or CPA firm offers a few advantages including the time you currently devote to accounting and tax preparation and filing—most small business owners spend up to 120 hours a year on bookkeeping alone; that’s 10 hours a month that could be allocated elsewhere in the business. Another valuable aspect is the potential for saving money by taking advantage of deductions. Staying current with finances and remaining (or getting to) good standing with the IRS can help decrease your risk of being audited.
The Business Tax Help Process
If you decide you want to hire a CPA, you might be running through the onboarding scenario. If your finances are in a less-than-perfect state of order, you might also be questioning whether it’s worth your time to invest in accounting services. Pain now, gain later? You’re probably in better shape than you realize, and your possible financial partner can help you see that. Getting your financials in order so your business is able to hand over visibility and access is also something a CPA can help you tackle.
What you need for business tax preparation:
During the due diligence or onboarding process, an accountant typically requests a list of documents including:- Three years of financial statements and tax returns
- Organizational documents—articles, charts, SS4, operating agreements, etc.
- Depreciation schedules
- Basis schedules
- Advisors—bank(s), attorney, financial advisor
- Trust, wills, and estate documents
- Passwords and logins
Tax and Business Services
It’s likely a cliche, but you can’t put a price on peace of mind. An accountant serves many purposes for small businesses, often operating in duality between financial and business advisor. The value extends far beyond the books; acting as a consultant on business practices and operations to keep your company running smoothly and being prepared when things don’t go according to plan.
When it comes to actual tax preparation, a CPA can file on your behalf and take care of managing the entire process including paying estimates. They are trained to keep businesses on the compliant side of the IRS and offer a reprieve from stressing over that year after year.
You can't put a price on that.
