If you don’t have good knowledge of tax laws or recently started a business you should consider hiring a professional for calculating and filing your taxes.
Business taxes aren’t anything like personal taxes and require detailed reports of all business expenses & incomes. Unless you want to make any stupid mistake which might cost you in the long run, you should “always” hire a professional to file your taxes.
Here are seven biggest mistakes you need to avoid when hiring a tax preparer for your business.
1. Hiring The Cheapest Person
There’s no harm in booking a cheap flight, but can you look for a cheap doctor? Similar to that, there’s a very high risk that the person charging you low doesn’t understand the whole situation completely and is also inexperienced. You should look for someone who is experienced, can provide proper guidance and have high credentials. On the other hand, you should also avoid someone charging a percentage-fee based on the amount of your tax. The fee charged should solely be based on the time involved and forms/schedules required.
2. Hiring A Tax Preparer Just For Tax Season
We all tend to look for quick solutions when we have a deadline to achieve. But hiring a tax preparer for your business is highly crucial for your business growth and planning for the future. You should look for someone who is a professional tax advisor & certified public accountant (CPA). The tax preparer should at least check your financial books for income-&-expenses on a quarterly basis, minimize business tax and help you plan for the future.
3. Hiring A Non-Professional
A professional should be a certified accountant or an enrolled agent at IRS who has a PTIN (Preparer Tax Identification Number). Make sure you ask for certifications and proofs, or better take help from other businesses in your area and check who they recommend.
4. Hiring A Defensive Individual
Most tax preparers and CPAs try to maintain their own reputation by keeping your business on the line. You should go for someone who is ready to play offense on taxes and assertively take all necessary steps to ensure that you pay legally minimal taxes. Your strategy should be to ask, “What’s the least I need to pay for my business which is legally accepted?”
5. Hiring Someone Who Guarantee Refunds
Tax preparers cannot guarantee any refund if your business situation doesn’t warrant a refund unless he has filed higher deductions or exemptions or reported a wrong income.
You simply cannot trust someone who advertises that; you can walk out of their offices with a cheque in your hand. There are higher chances that they’ve fiddled with your taxes and are not selling competent tax preparation. The least they can guarantee is that by using their services you’ll have to pay the minimal taxes that you owe to the state.
6. Hiring An IRS Audit Fearing Advisor
If the tax advisor does the job right and you have good records, you can easily go through an IRS Audit efficiently. You need to make sure you hire someone who is not afraid to go with you to an IRS Audit which can save you money and stress. And to be on the safer side, you can also look for professional IRS tax audit lawyers who can help in any complicated situations if the need arises.
7. Hiring Someone Who Won’t Sign Your Returns
The IRS requires all tax preparers to sign the final form which they’ve prepared and paid for. If your tax preparer refuses to sign your finished returns, they are not the right choice for you.
We hope these tips help you in making sure that you hire a professionally competent and helpful tax preparer for your business.