Join our free webinar on December 5 to find out
Tax season won’t be revving up for a few more months, but if you’re a small business owner or accountant, you know the time for preparing has already begun. And this year, with new tax laws in place, it’s more important than ever to start early.
If you’re feeling anxious about this year’s taxes, rest assured you’re not the only one. There’s a lot to think about. Here’s a brief checklist:
- Who’s doing the filing? You? An accountant? Someone in the office with help from an accountant?
- What deductions will you take, and do you have all the documentation for those deductions?
- Do you have money put away for taxes?
- Are all the necessary records, forms, and statements available and organized?
- If your business has undergone any major changes, such as the loss of a business partner or a change to the business loan, are you aware of how that information might affect your taxes?
TSheets and QuickBooks Payroll recently asked 600 small business professionals — business owners, accountants, and payroll administrators or bookkeepers — about their business’s tax habits. And they said something interesting. While 48 percent listed taxes among their top three greatest challenges, 49 percent said they don’t get help from an accountant or tax expert because they consider it too expensive.
But can small businesses afford to take such a risk?
The unexpected benefits of hiring a tax professional
Forget the costs of tax evasion or any of those more terrifying consequences of failing to file correctly. Not soliciting the help of an expert may cause you to leave money on the table, and that’s not all.
When asked how their external accountant or tax expert helped them, 85 percent of those who answered said this person has saved them money. Ninety percent said their tax expert saved them time, and 89 percent said having one reduced their stress.
What’s more, 85 percent said having a tax expert has helped them stay compliant, and 84 percent found it helped them plan.
Most people who have a tax expert start preparing their taxes four or fewer months before taxes are due, while those folks who do their own taxes require more time. Among these, the majority start preparing their taxes five or more months in advance, and 22 percent said they start a year before taxes are due. If time is money, doesn’t it make more sense to hand off this time-consuming task to a professional?
Outsourced taxes yield greater tax refunds
It might seem more expensive to hire a tax expert, but could a greater investment upfront lead to more significant savings later? We compared the answers among two groups:
- Those who outsourced everything to an accountant or tax expert.
- Those who took care of the business’s taxes themselves or took care of their own taxes in-house but did so with outside help from an accountant.
We asked these two groups whether they received a tax refund or ended up owing money, and the results were clear. Small businesses that outsourced their taxes to an expert received a larger tax refund than those who did not. Both groups agreed that their refund was very helpful for the overall financial health of the business, and most used it to pay off debt.
However, those who didn’t rely on an accountant at all reported receiving the most money back. Some of these claimed they did not consult an accountant because they had all the necessary expertise in-house.
Of course, getting back a large tax return at the end of the year isn’t necessarily a good thing. As U.S. News points out, getting back a large tax refund means the government has been hanging on to more of your money throughout the rest of the year — interest-free — that you didn’t necessarily need to pay.
And it makes sense if this group is overpaying throughout the year. When asked what aspect of tax season was the most challenging, 43 percent cited planning for what they’ll owe. Twenty percent weren’t sure how to even file their taxes correctly.
File small business taxes with confidence, register for a free tax webinar
If you have questions about tax filings in 2019, you’re not alone — particularly since the passage of the 2017 Tax Cuts and Jobs Act. The good news is TSheets is here to help. Besides providing you with a stellar time-tracking solution designed to make payroll and record keeping easier than ever, we’re also hosting a webinar with QuickBooks Payroll that you won’t want to miss.
Join us for a free one-hour webinar with leading tax experts, Wednesday, December 5, 2018, at 11 a.m. ET (9 a.m. MT, 8 a.m. PT).
Learn about prepping, paying, and filing taxes as a small business owner. Find out how the recent tax reforms will impact your business, how to ensure compliance, and how to know when it’s time to enlist some help. It’s our final webinar of 2018 and spaces are limited, so register now!