Are you feeling overwhelmed by the endless forms and deadlines of tax season? Tax season can be stressful, and it can feel like you’re drowning in paperwork. If you’re reading this, you are probably behind on your tax preparation. But don’t worry. Many people are unsure where to begin. The good news is that there is still time to organize and ensure you are taking advantage of all available deductions and credits. We’ll give you useful tips and information to make tax season as easy as possible and help you find opportunities to get the most out of your 2022 tax return.
Contact LLB CPA for help preparing your 2022 Business Tax Filing
What is a professional tax preparer?
Business owners often ask, “Should I work with a tax preparer, or is it easy to use tax preparation software?”. The truth is, both are valuable when it comes to tax preparation, it just depends on your individual circumstances and needs. The more complicated your tax situation — often in the case of businesses — the more beneficial it will be for you to use a professional CPA and tax preparer to prepare your tax filing. Let’s go over what each can provide.
A CPA or professional tax preparer has the knowledge and experience to assist you in preparing and filing your personal and business tax returns in a more accurate and efficient way. They understand tax codes and can identify deductions and credits that you may need to be aware of.
On the other hand, tax software is a computer program that allows you to enter information about your income and expenses and then generate a tax return based on that information. Depending on your tax situation, using tax software to prepare your tax filings can be a convenient, affordable, and user-friendly option, however, it is not necessarily the best choice for handling more complex tax situations, such as those for businesses. This is where a licensed tax professional can come in handy.
What is the difference between a tax preparer and a Certified Public Accountant (CPA)?
A Certified Public Accountant (CPA) and a tax preparer are both professionals who can assist with tax preparation and filing, but there are some key differences between the two.
A CPA is a licensed professional who has passed a rigorous exam and meets certain education and experience requirements. They can provide a wider range of financial services, including tax preparation, bookkeeping, auditing, and financial consulting. Additionally, a CPA has a higher level of expertise and is held to a higher ethical standard.
A tax preparer, also known as an enrolled agent, is certified to prepare your taxes and apply the tax code to fit your individual financial situation. However, they will likely have less formal training and be limited to preparing, signing, and filing your taxes on your behalf.
If you’re looking for a more full-service option, you’ll want to consider using a CPA instead of a tax preparer, as they will be able to keep your business’s financials in line all year long and help you plan for next year’s tax filing as well.
The benefits of using a CPA or professional tax preparer
Opting for a licensed professional, such as a CPA or a professional tax preparer, offers a multitude of benefits. Still, the biggest overall benefit is the peace of mind, savings, and improved overall tax experience you will receive when working with these professionals. Here’s how it works.
A CPA or tax preparer is trained to stay current on tax laws and regulations, ensuring that your company’s taxes are filed accurately and efficiently. This can also make you feel more at ease because a tax preparer can provide personalized advice and strategy tailored to your tax situation. Such as assisting you in requesting an extension, filing amended returns, and providing ongoing support.
Avoid mistakes and maximize your tax returns
When doing your taxes, the chances of making a mistake are high and far-reaching. Errors can result in audits, fines, and even legal issues. A CPA, on the other hand, can help you minimize those mistakes by identifying them early on. They can check to see if you’re sending the correct tax forms and if you’re not combining business and personal expenses. They can also assist you in identifying appropriate tax deductions that can be deducted as part of your expenses. Business expenses include things like food, travel, and office supplies. You’d also need to make sure you’re filing taxes on time, depending on how your business is set up. Some businesses file quarterly or annual tax returns.
Here is a tax calendar from the IRS which shows you specific due dates for filing and paying taxes.
To ensure that your business is getting the most out of a CPA, ask if they offer additional services that can specifically meet your needs beyond tax season. In addition to taxes, a CPA can handle payroll, investigate fraud allegations, and even advise you on the best employee benefits for your company based on your financial situation.
Overall, if you intend to restructure or grow your business in the future, a CPA may be the right partner in the long run.
Get professional advice from a CPA or tax preparer
Wouldn’t it be great to have someone you can rely on to know the ins and outs of your business and understand its financial health? The advantage of using a CPA is that you can work with the same person year after year. The more familiar your CPA becomes with your company, the better they can deliver on your return on investment (ROI) over time. They can assist you in planning for the future by providing advice on tax strategies that your company should pursue to maximize savings, reduce your tax bill, and meet or exceed your financial goals…
If you decide to provide employee benefits such as health insurance, your CPA can help you select the best HMO or PPO plan while also reducing company costs. For instance, every business is unique, but you may be eligible for SHOP insurance if you have fewer than 25 employees. (SHOP) stands for Small Business Health Options Program. You may be eligible for group insurance if you have more than 50 employees. And more importantly, if you paid employee health insurance premiums, you could deduct them as a business expense.
Plan ahead, save time, and reduce stress by streamlining the tax preparation and filing process with a CPA
You may only think about taxes once the new year arrives. However, once January arrives, you begin going through your files to figure out exactly what is required. This can be time-consuming, making the tax process even more tedious. But working with a professional tax preparer all year can help you save time and streamline the process before you file your taxes. Here are a few ways you and a licensed CPA can make tax preparation easier in 2023 and beyond:
- Organize Important Tax Documents: Organize and gather all necessary documents and information before meeting with your CPA. This will allow you to make the most of your time and avoid any last-minute delays. Documents include W-2 forms, 1099s, business expense receipts, and other relevant information. Additionally, be open and honest about your financial situation, including your income, expenses, and any investments or assets. This will assist your tax preparer in understanding your tax situation and providing personalized advice.
- Communicate With Your CPA: Another way to save time when working with a CPA is to maintain regular communication. This includes promptly responding to any questions or requests and keeping your tax preparer up to date on any changes in your financial situation.
- Stay Informed With Tax Laws: Tax laws and regulations are constantly changing, so it’s critical to understand the current tax landscape to minimize your tax bill and ensure that your taxes are correct and up to date. A professional tax preparer is familiar with various tax laws and can assist you in understanding and simplifying what those laws mean.
The cost of professional tax preparation vs. the cost of DIY tax software
Tax preparation in the comfort of your own home may sound appealing. But what if you encounter situations you need help with or if you have specific questions that online customer support cannot answer?
When you consider the possibility of missed deductions, costly mistakes, and audits, the costs of DIY tax preparation can quickly add up.
For example, have you dealt with IRS issues? The process can be overwhelming and time-consuming, especially if you are being audited. But with a CPA, they will review any IRS notices and assist in resolving tax disputes and negotiating payment plans to minimize the impact on your business. A CPA can also represent you before the IRS if you provide them with a written power of attorney.
When it comes to tax software, they can offer professional guidance at an extra cost. However, receiving advice from a tax software, whether via live chat or phone call, may not be the same as receiving tailored advice from a CPA or tax preparer who knows you and your business. Furthermore, you can contact them at any time of year if you have any questions or concerns.
Hiring a tax professional can vary depending on price, but it can help you save money in the long run by ensuring your taxes are correctly prepared and filed, helping you avoid fees, missed payments, and more. With the added expertise and experience of a tax professional, you can have peace of mind knowing that your taxes are being appropriately handled while potentially avoiding costly missteps.
Save time, money, and headaches by hiring a professional tax preparer for your business this tax season
If you want a stress-free tax season this year and the potential long-term savings of working with a professional tax preparer, look no further than LLB CPA. Our team has the experience and expertise to handle your tax needs and help you avoid mistakes, save time, provide ongoing guidance throughout the year, and, most importantly, find opportunities to maximize your tax returns.
Don’t waste time. Take advantage of our exceptional tax services today. Contact us so we can help you save time, money, and headaches this tax season.