The paying of taxes is an essential aspect of your business. As your business grows, paying business taxes becomes a more complex, time-consuming matter. It’s tempting to try and do your business taxes on your own. But it might be a better idea to leave this task to a professional, a Certified Public Accountant.
1- Expert Knowledge of Tax Laws and Regulations
The tax code is notoriously complex, overly so, and it can change annually, making it difficult to stay on top of laws and potential penalties. Further still, annual legislation enacted after the publication of the tax code can alter it. This makes paying business taxes even more complicated. A CPA is a trained, certified professional with in-depth knowledge of annual tax laws and regulations.
They understand the tiniest details of the tax code, using this knowledge to minimize your tax liability. CPAs also keep your business in compliance with local, state, and federal tax laws.
2- A CPA Saves Time For You
When preparing and filing business taxes by yourself, the process can take up lots of your time. This is especially true when your business is complex and/or has multiple revenue streams.
The sheer amount of deadlines, paperwork, and calculations might require days just to research, let alone negotiate correctly. This is valuable time you could better use to hire, train, develop products/services, and market your business. Let a CPA handle the entire process for you, and devote the time you save to your passion.
3- Accuracy and Timely Financial Reporting
It’s critical to maintain accuracy for overall business management, taxes, and reporting. CPAs have special training to help you maintain comprehensive, correct financial records.
These records are central to the process of paying taxes and financial reporting. Paying on time and reporting correctly helps prevent overpaying, missed deadlines, penalties, or a lengthy, invasive business audit.
4- Optimal Tax Planning and Financial Strategy
A CPA does more than just prepare and file your business’ taxes. They can also help you minimize tax liability and maximize profit through the optimal financial structure of your business.
This helps you save money and take advantage of incentives and credits. With more capital freed up, you’re better positioned to expand your team, make business purchases, and plan for eventual growth.
5- An Experienced Representative During an Audit
Businesses of all types and sizes dread the infamous IRS tax audit. Often, audits happen for the most innocent reasons: accidental misreporting, excessive expenses/spending, or employee misclassification.
Audits can be long, tedious, and uncomfortable, and you can end up with penalties. Your CPA works diligently to prevent an audit, period. If an audit happens, hire a CPA to support and represent your business.
The CPA acts as your experienced team member, identifying audit triggers and communicating with the IRS. Having someone in your corner reduces stress and confusion, allowing you to focus on your business.
6- Deductions, Incentives and Credits
Best of all, your CPA is a master at helping your business reap the most deductions, incentives, and credits. Viable deductions, incentives, and credits vary between states, business types, and fiscal years.
Deductions, incentives, and credits can put thousands upon thousands of dollars back into your business. Saving money and time is a win-win, making a CPA one of your business’ single best investments.