08 Jan What Hat Do You Wear?
Why is resolving your tax problem on your own or preparing your business tax return an awful idea?
Running your own business means wearing a lot of hats, from janitor and head of HR to client schmoozer and marketing director. But should you add the role of tax preparer to your already long list of duties? What if you have a tax problem with the IRS? What if preparing your own taxes creates a tax problem?
In our practice, we regularly see many small business clients. Clients come in with tax problems. They may have a schedule C, or a corporation, partnership, or LLC, with payroll and income tax problems, or they were flagged for an audit. Simply because they thought they could do it on their own. It’s so not a good idea.
If you prepared your taxes when you were an employee or freelancer, you might think that preparing the tax return for your small business is no big deal. There are plenty of great tools on the market, from expensive tracking apps for your devices to software such as QuickBooks for your computer. But before you start scanning your receipts and filling out all of those forms, you might want to reconsider.
Note; we encourage all readers facing an IRS or state tax problem to contact us for a FREE, no-obligation, confidential consultation at http://bit.ly/2Hh7cEl. Or schedule your appointment online at https://meetme.so/SFSTax. We can also help you with unfiled tax returns for previous years and get your business back into compliance.
Even if you think you can, preparing your business taxes on your own, it is not in your best interest. Resolving your tax problem is an even worse idea. Here are some of the reasons you should leave the filing of your business tax returns and resolving your business IRS tax problem to the professionals.
It is Easy to Make a Mistake
Even a small business tax return can be a multitude of pages, and many returns are even more complicated than that. With so many numbers and so much information, you have thousands of opportunities to make a mistake.
Even a small mistake could have dire consequences for your small business, and doing your own taxes puts you at risk. Inadvertent blunders could mean paying more taxes than you should or cost you in penalties and interest. At worst, these errors could trigger an audit and tie your business up for months. If you owe back taxes, the IRS can put a levy on your bank account and put a lien on your property until you pay up.
The Tax Laws Are Always Changing
Last year our tax laws had some of the most dramatic changes seen in the previous thirty years. The tax code is already one of the most complex documents ever written, with more words than the Bible and complexities at every turn. Those laws are not static; they are always changing. Think qualified Business Income Deduction or Specified Service Trade Or Business.
Even if you are an expert on the current tax code, that expertise will not last long. Every new year brings a slew of new tax changes, and many of them will directly impact your small business. If you rely on your expertise and your technological tools, you could miss an important update that could save your firm money or help you avoid the wrath of the IRS. If you recall, Congress just passed the Secure Act on December 20, 2019, and reenacted the “extenders.” Some retroactive to 2018.
You, Will, Be on Your Own in Case of Audit
As an individual taxpayer, your chances of being audited are less than 1%, but as a business owner, filing a schedule C the odds are far higher. The IRS is increasingly setting its sights on the small business community, and that means you have a target on your back.
Even if you do everything correctly, you have a good chance of being audited sooner or later. And if you prepare your taxes, you could be on your own when the IRS comes calling.
Audit defense and IRS representation is a specialized skill set which 95% of CPA’s don’t have. We always recommend hiring an experienced and reputable tax resolution firm like ours, who deals with the IRS for a living, day-in, day-out.
The Expertise You Gain When Hiring A Pro is Well Worth the Cost
Having your business taxes prepared by a tax professional can be expensive. Depending on the size and complexity of the return, you could pay several hundred dollars to several thousand, to have the returns prepared correctly.
Even so, this is one expense you should be eager to incur. If you do your own business taxes and make a mistake, even a single error could cost you many times the fee you’ll pay to have it done right. So, do yourself and your business a favor; leave your taxes to the experts.
Running a small business is tough enough. The last thing you want to do is add more tasks to your already busy plate or getting into tax trouble. If you are still doing your business tax returns, it may be time to hand off this vital service to a professional.
SFS Tax Problem Solutions specializes in tax resolution; even if you have years of unfiled tax returns, we can help! If you want a certified tax resolution specialist who knows how to navigate the IRS maze, reach out to us. We’ll schedule a no-obligation confidential consultation to explain your options to resolve your tax problem permanently. http://bit.ly/2Hh7cElor book online at https://meetme.so/SFSTax