Running your own business means wearing a lot of hats, from office cleaner and supplies buyer to client schmoozer and payroll maker. But should you add tax preparer to your already long list of duties? What if you have a tax problem with the IRS? What if doing your own taxes creates a tax problem?
We often see small business clients, clients with either a schedule C, or a corporation, partnership or LLC, with payroll and income tax problems, or an audit, simply because they thought they could do it on their own. It’s a bad idea.
If you are used to doing your own taxes when you were an employee or freelancer, you may think that preparing the tax return for your small business will be no big deal. After all, there are plenty of great tools on the market, from expense tracking apps for your smartphone to software like QuickBooks for your laptop. But before you start scanning those receipts and filling out those endless forms, you might want to reconsider.
Note, we encourage all readers facing an IRS tax problem to contact Jim Liang for a free, no-obligation, confidential consultation. Jim can also help with unfiled tax returns for previous years, getting your business back into compliance.
Even if you think you can, doing your own business taxes is a terrible idea. Resolving your own tax problem is an even worse idea. Here are some of the reasons you should leave the filing of your business tax returns and resolving your business IRS tax problem to the professionals...
Even a small business tax return can span dozens of pages, and many returns are even more complex. With so many figures and so much information, you have literally thousands of opportunities to make a mistake.
Even a small mistake could have big consequences for your small business, and doing your own taxes puts you at risk. At the very least, those inadvertent blunders could mean paying more taxes than you should or cost you in penalties and interest; at worst those errors could trigger an audit and tie your business up for months. If you owe back taxes, the IRS can put a levy on your bank account and put a lien on your property until you pay up.
Our tax laws have had some of the most dramatic changes last year than they had the previous 30 years. The tax code is already one of the most complex documents ever written, with more words than the Bible and complexities at every turn. To make matters even worse, those laws are not static; they are always changing.
Even if you are an expert on the current tax code, that expertise will not last long. Every new year brings a slew of new tax changes, and many of them will directly impact your small business. If you rely on your own expertise and your technological tools, you could miss a vital update that could save your firm money or help you avoid the ire of the IRS.
As an individual taxpayer, your chances of being audited are less than 1%, but as a business owner, filing a schedule C the odds are far higher. The IRS is increasingly setting its sights on the small business community, and that means you have a target on your back.
Even if you do everything perfectly, you have a good chance of being audited sooner or later. And if you prepare your own taxes, you could be on your own when the IRS comes calling.
Audit defense and IRS representation is a specialized skill set which 95% of CPA’s don’t have. We always recommend hiring an experienced and reputable tax resolution firm like Jim’s who deals with the IRS for a living, day-in, day-out.
Having your business taxes professionally prepared can be expensive. Depending on the size and complexity of the return, you could pay several hundred dollars to several thousand, to have the work done.
Even so, this is one expense you should be happy to incur. If you do your own business taxes and make a mistake, even a single blunder could cost you many times the fee you’ll pay to have it done right. So, do yourself and your business a favor; leave the taxes to the experts.
Running a small business is hard enough. The last thing you want to do is add more tasks to your already busy plate or getting into tax trouble. If you are still doing your own business tax returns, it may be time to hand off this vital service to a professional.
Jim’s firm specializes in tax resolution, even if you have years of unfiled tax returns, he can help! If you want an expert tax resolution specialist who knows how to navigate the IRS maze, reach out to Jim to schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem.