2012 is over. Your sales are done. Your records are final. Your last bank statements should be arriving any day. It is time to start thinking about your 2012 taxes. Now you have to decide if you should go it alone or hire a professional. Instead of debating whether to use TurboTax Online or H&R Block Online, here are some solid reasons why you should have a professional do your business taxes.
Table of Contents
Business vs. Personal Taxes
In your past, your personal taxes may have been fairly simple. If you only had a W-2, a couple of 1099s, and a mortgage interest write off or student loan interest deduction, your taxes were easy. You could plug them into tax software quickly and easily and your results were fast and cheap to get.
Unless your business is very, very simple, your business taxes are not quite so easy. A simple computer program or website probably can’t handle it.
Schedule C vs. Business Filing
Each business tax filing is unique. For example, the form you use might be completely different depending on how you started the company. If it is a pass-through entity, like a single member LLC or sole proprietorship, your business income goes onto a schedule C on your personal tax filing. If you have a taxable entity, like a C-Corp, the taxes must be filed separately.
This is a simple issue to solve, but if you didn’t know the background, you might have filed your taxes completely wrong.
Complex Deduction Rules
You can deduct all of your business expenses, except for the times when you can’t. Capital and investments are deductible, as are direct expenses.
But what about a business vehicle? The rules for that are incredibly complicated.
What about a home office? Home internet and phone and power costs? Again, very complicated.
Travel for your business? Those rules deserve their own book.
Those are just a few of the thousands of incredibly complicated IRS rules for business tax deductions. It is impossible for most business owners to know them all. That is why we hire a professional to handle it for us. (Did I mention you can write off accountant costs?)
Ever Changing Laws
Tax laws change every year. It is nearly impossible to keep up with all of them. Most of them will not impact you or your company, but some of them could. Not knowing the new rules could cost you a lot of money or put you on the wrong side of the law.
To avoid an audit or problem with your taxes, hiring a professional is the best option. I have had a professional tax preparer all of my life. I have never worried about filing a form incorrectly, I have never worried about an audit, and I always have someone to call if I have a question. I highly suggest all small business owners do the same.
About Carson Derrow
