Tax preparation season is just around the corner, which means it’s time to get out the books and go over your small business operations as you prepare all those required tax forms. Just as many individuals consider hiring a tax professional to help them with their taxes, so too do many small business owners. But what if, instead of hiring a tax professional seasonally, you considered bringing one on your staff full time? What are some advantages and disadvantages of this move, and how could it contrast to your contracting the tax preparation work out each year? Well, here are a few things that could help you decide what to do.
Think about the Needs of Your Home Business
If you simply work at home and have a relatively small staff, then odds are your tax situation is not that complicated. In this case, you would benefit from paying the nominal contract fee to have a tax professional work on your tax return. Your needs are relatively small, which you can handle on your own as you attend to other matters of managing the business. However, if your business is growing and you have other expenses associated with the business, especially new expenses that you are unfamiliar with managing, then you could benefit from hiring a full-time tax professional. Your tax professional would not only take care of tax preparation each year, but also he or she would help you make tax-related business decisions throughout the year. Should you rent or purchase necessary equipment? What can and cannot be written off as a business expense? Your tax professional can help you make these long-term decisions in the best interest of your company.
How Much Can You Afford to Pay a Tax Professional?
Another thing you will have to think about is whether or not paying a tax professional fits into your company’s budget. If your company isn’t growing quickly and is still a small operation, you might consider using that money to instead hire a bookkeeper to track your financial situation. That way when it’s time to hire a tax professional, you’ll have the organized books to show him or her as you work to get your tax situation under control. If, however, your company is growing quickly, you might want to hire both a bookkeeper and a tax professional, for these people can best help you manage that growth in ways that takes advantage of unseen opportunities while still keeping your company compliant with tax code. The costs associated with each of these options is probably far higher than what you would get if you simply went to a tax professional on contract once a year; however, the long term benefits are very big.
What about Professional Relationships?
Finally, should you decide to hire a full time tax professional, you will need to make sure the new employee is someone whose entrepreneurial vision aligns with yours and that of your small business. If he or she demonstrates a similar business philosophy, then the decisions you both make together will happen a lot easier than if you were working with someone with whom you often disagree. In many cases, it might be helpful to hire someone with whom you have already contracted to work on previous tax projects. Also consider interviewing tax professionals who come recommended by other small business owners with similar companies.
About the Author:
This guest post is contributed by Raine Parker, who writes on the topics of accounting degree . She welcomes your comments at her email Id: raine.parker6 @ gmail.com.