Filing taxes for your small business can be time-consuming. And, while you might gain a thorough knowledge of your financial situation and are prepared to work overtime when it comes to tax season, odds are it’s unsustainable.
Sometimes you might think giving your tax responsibilities to a chartered accountant will solve every problem, but you neglect to compare their rate to your everyday accountant. Hiring an accountant will allow you to receive reports whenever it is necessary at a cheaper rate. They will also file your taxes in a timely manner.
Maybe your budget or needs require only partial services of an accountant. Hiring a part-time accountant means lower retainer fees. If you’re not planning to use their services all year round then outsourcing is your best option. You may need a dedicated bookkeeper and only call upon your tax advisor come tax season. Small business taxes require accurate bookkeeping independent of your accountant.
Part-time accountants understand small businesses need to cut down their taxes, and they know when and how to apply regulations in their favour. Don’t know if you qualify for tax relief? They know your situation and how to maximise it.
Accountants provide additional benefits such as planning accounting strategies and inevitably have experience working in a team.
What to consider when hiring an accountant for your taxes
If you’re not acquainted with or don’t have referrals when hiring a tax accountant, here are a few questions to consider when hiring your first business accountant to gauge their possible level of contribution to your business.
Will they assist you beyond your tax necessities?
Tax season is when they’re most needed, but their role impacts you when it comes to auditing too (depending on your PI score). Are they available out of tax season? If they don’t have a full schedule year-round, are they at least the type of person that would proactively keep up to date with the changes in tax laws?
Availability: what’s their schedule?
Can you call on them multiple times a year? A month? Whenever you’re in need of financial advice? Are they more interested in helping higher-paying clients instead of managing your small business taxes on a consistent basis? Such details are better known before engaging them for your accounting needs.
Level of experience in relation to your tax needs?
Availability is one thing, but prior experience with similar businesses can mean finding relevant write-offs and tax liability before deadlines pass. Are they well-versed, but not where you need their problem-solving skills? Find an accountant with relevant experience by interviewing more than one.
With the right accountant helping you with your small business taxes, you can expect certain benefits such as:
Like every other enterprise, small business taxes are treated the same. You still have the same responsibilities, not to mention the same resources, too. Compiling and submitting your annual tax statements are made more efficient with eFiling. Keeping around accountants that understand taxes can contribute to your business’s deductions and decrease the workload for the accounting department.
Do you know whether your small or medium-sized business qualifies for turnover tax (TOT)? The difference in your annual profit could be affected tremendously if you’re paying both income tax and VAT as opposed to paying TOT. Hiring an accountant on such matters could bring your financial standing up a few notches. They could also institute efficient tax processes for the next employee. Restructuring isn’t the easiest task, but with an intuitive mind versed in small business taxes, you will have guided yourself onto the right path.
Whilst you could do your annual tax returns online, hiring an accountant will simplify the process and effortlessly keep you compliant with governing tax regulations.
Advisory in tax returns and deductions
The number one job of your account is to save you money on your small business taxes. They know where to apply for exemptions, what to register as annual tax deductions, and increase your overall cash flow as a result of filing accurate tax returns.
Knowing what deductions need to be made can be overwhelming, but having an accountant to help you make decisions (like choosing between a standardized deduction or an itemized deduction) is invaluable. As seasoned veterans in tax deductions, they can help decrease your small business taxes significantly.
Their work is made easier with well-documented financial records managed by a bookkeeper. The two would often work hand in hand.
Certain professional accountants like chartered accountants or enrolled agents can also advise you on your small business taxes. Both are educated in tax breaks and all matters pertaining to tax as mentioned. While you would rely on your accountant for other small business tax services, you would benefit more from in-depth consulting from specialised accountants. With an increase in profits, refunds, and exemptions you’re able to increase cash flow and hold on to your assets.