Everyone has the option of preparing their taxes on their own or hiring an accountant to do it for them. Many people who hire an accountant do so because they are concerned that they might make an error if they attempted to handle their taxes on their own, and that error could come back and cause problems for them later.
Depending on a variety of factors, like the number of income sources and deductions that you expect to have, preparing your own taxes can either be fairly straightforward or quite complicated. Many people feel that the peace of mind that comes from hiring an accountant to prepare their taxes outweighs the costs. If you do choose to hire an accountant, there are some steps that you can take to make sure that you get the maximum benefit from that investment. Here are some tips to help you through that process:
- Your accountant is there to accurately prepare and file your taxes. However, the accountant only has the information that you provide to her with which to work. Hiring an accountant does not free you from all tax-related responsibilities. In order to achieve the best possible outcome from hiring an accountant, you should keep clear and accurate records of your finances and tax-related ventures, and provide all of those details to your accountant at tax time. Of course, your accountant will ask you a series of basic questions about your financial background, but don’t make her pull teeth. Being prepared with all relevant information and documents will give your accountant better information to work with and leave more time available for the accountant to discuss with you what you can do to minimize your tax liability in the future.
- In order to know what records you should keep for taxes, you must know what deductions you might qualify for. For example, if you own a small business, there are many deductions that are available to you that aren’t available to the average taxpayer. If you don’t find out about these deductions until tax time, it could be difficulty or nearly impossible to go back and obtain the proper records and documents to justify the deductions. If you do have your own business, be sure to keep track of any office-related expenses, including materials, supplies, wages paid, and such.
- Provide as much information as possible. When you are compiling your expenses, be sure to include anything that you think might qualify as a deduction. There may be deductions that are available that you are not aware of. It is the responsibility of the accountant to determine which expenses qualify, so provide any expenses that might possibly qualify. Leave it to your accountant to filter out those expenses that do not qualify.
- Meet with your accountant after your taxes are completed to discuss what you can do better next year. There are two aspects at play here. First, your accountant can advise you on how you can maximize your deductions. You may find that it is worthwhile to do things like upgrading your office space because you will reap the benefits of a tax deduction. Second, this is a good opportunity for your accountant to inform you of what information you should track and provide for next year.
If you need tax advice for your small business, contact Acceler8. We are small business consultants who offer advice on matters from tax and accounting to business solutions to exit planning. Call Acceler8 for advice on handling your small business today.