Tax Season is upon us and our intentions to spearhead tax goals like a Viking usually fall short to reality. Life can sometimes get in the way of plans (what else is new?) and when you're choosing between software, an accountant or a large tax preparation company to assist in filing taxes, deciding on the best option for you and your business can be deceiving. In fact, according to a CNBC survey, almost half of the nation's taxpayers do their own taxes, but it's no guarantee that they're being done well. I sat down with Melinda Mirto from Mirto CPA PLLC and learned a few of the reasons why hiring a professional, licensed accountant to help with tax and business needs is a must.
If You're Starting a Small Business. Starting your own business can be an enormous undertaking and an intimidating commitment. Having an accountant to help you through the process can pose a major relief. As Mirto relays, "Business owners put their focus on their business [as they should]; they're not accountants and they don't work for the IRS." And Mirto assures our readers that small mistakes can create long-term complications. For example, if a small business were to purchase a business license under an incorrect entity, this could leave openings for greater liability. Don't leave openings for greater liability. Our advice? Talk with an accountant first and start your business on the right foot; the foot that is most advantageous to your business.
If You Own a Small Business. The most common problem that Mirto comes across with small businesses are, unbeknownst to them, they "aren't paying the correct taxes or filing the right forms, leading to problems with the IRS." She further explains that sometimes the IRS doesn't audit a business for years, so "you may think that you're in the clear, but after two years without audits, the IRS will find you've done something wrong," which can lead to unnecessary penalties. Yikes. Plus, large tax preparation companies or filing services tend to group businesses into general categories when filing taxes, whereas a professional accountant can easily recognize a business' unique needs and specific deductions. Simply put, Mirto explains that "because every business is different, having an accountant to identify what's best for it's particular needs is crucial and could be the difference of saving thousands of dollars throughout the year; tax software just can't give you that." Moreover, small businesses that have an accountant prepare individual and business returns for the year can eliminate possible phase-outs from deductions that otherwise wouldn't be available to them. Suddenly, the extra money towards hiring a professional for your business needs doesn't seem so steep.
Individuals. Most people think they're in the clear when using a simple software to file their taxes, but Mirto explains that "a lot of people aren't getting the deductions and credits they could be." When you hire a professional to file your taxes, they can easily identify the best strategy for you to get your penny's worth. She goes on to further disclose that some individuals that prepare their own tax returns will use incorrect tactics to receive bigger refunds, so they're actually taking credits that aren't due to them. So, what does this mean in the grand scheme of things? If the IRS doesn't catch this mistake right away, you'll have to pay the money back, plus interest and pop-up fees. Skip the fees. Hire an accountant who can help you do it right the first time around and get the most bang for your buck.
The Times They Are a Changing. Our taxes and the policies that accompany them have the capacity to quickly change. It's important to have the know-how to identify these changes and to make sure that we abide by the law throughout the process. Mirto explains over the past few years, a growing trend with the current health insurance policy is to under claim earnings to offset growing costs. Why this doesn't work? Any "saved" expenses translate into unpaid tax credits and ultimately, bunched fines. And with Trump's newest proposals and the ever-changing political climate, Mirto urges taxpayers that it's never too early to start considering a plan for next year's taxes. To learn more about Mirto CPA PLLC, click here.
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