Four Reasons To Use A Professional For Tax Preparation Instead Of Software

Posted on: 16 November 2015

Small business owners often use software for their taxes each year, but there are many advantages to hiring an account to do this work for you. The following are four reasons to use a professional tax accountant.

An accountant can maximize your deductions

Using tax software is simply a matter of answering questions. The program does the rest. With the data you have provided, computations are then made. However, an accountant, after a brief consultation with you, can explain some of the expenses that are deductible for your type of business that you may not be aware of. A computer program is mostly limited to the information you provide.

An accountant can help you plan for your taxes

There are many ways to reduce your tax liability for any given year, but often it takes planning because certain credits and deductions cannot be taken in the last month of the year. Depreciation for equipment, for example, accumulates each month throughout the year. Planning can help you purchase new equipment at the optimal time for tax purposes. Retirement planning accounts are another example. Knowing what actions you can take from the beginning of the year to reduce your taxes will increase your profits.

A tax accountant can answer questions

When you have questions about your taxes, a professional can answer them face to face to clear up any confusion you have regarding tax laws. In addition, an accountant can offer advice for your business as it relates to taxes, and this is available throughout the year. Tax software is updated annually to reflect new laws, but it does not help you with taxes as they relate to changing conditions in the economy or in your business model.

An tax accountant can help with your bookkeeping

Based upon your type of business and how much revenue you are generating, a tax accountant can help determine which method of accounting is best for you. There is more than one type of accounting method: the cash method and the accrual method. Using the wrong method can cost your business money in the form of higher taxes. The Internal Revenue Service allows a business to switch from one method to another, but there are strict rules on how this can be done. Using a professional for your business taxes means having the right method of accounting and implementing it according to IRS regulations.

If you are currently using tax software for your small business, you should give the ideas outlined above consideration. If you are a new business owner, your business can benefit from having a professional tax accountant (like those at Wiggins, Smit, Burby, Reineke, & Company P.A.) assist you from the beginning of your new company.