7 reasons why your business needs a REAL accountant, not QuickBooks or some accounting software
If you’re an entrepreneur, you know how hard it can be to do everything yourself. Accountants are trained professionals who specialize in tax planning and compliance, financial analysis and reporting, budgeting, forecasting, and business consulting. They help businesses set up the right systems for record-keeping and financial tracking so that all of your books are organized accurately and on time. This is especially critical when it comes to filing your taxes with the IRS!
In this blog post, I will explain why hiring an accountant can help you navigate today’s complicated tax laws while optimizing your financial position at the same time.
1. The current tax laws have been revised.
The new tax laws have been revised, and, if you work with an accountant, you will see that they’re more favorable for small business owners, individuals with large estates, and people who own property. This is great news for you! Even so, expect more tax law revisions going forward. It’s evident that President Biden still wants more, and might not rest until that happens.
As a small business owner, you’ll have more options when it comes to saving money on taxes. You can claim as many deductions as you are eligible for and tax credits. More so, this year, many small businesses who qualified for the Employee Retention Credit (ERC) could use the help of an accountant to claim these thousands of dollars. Please read my previous article to learn more about this.
Your accountant can help you figure out what type of entity your company should be so that it benefits from tax laws and help you keep as much money in your pocket as possible while still complying with state laws that require reporting income once per quarter or annually depending on how often they get paid out by clients/customers.
2. You have a business that is operating at a loss.
In the simplest terms, a business loss is a difference between your revenue and your expenses. If your revenue (receipts from customers) is less than your expenses (expenses that have been paid during the same period), then you have incurred a loss for that period.
If you have losses in one year, they can be carried over to future years as an offset to other income. You may also be eligible to claim certain deductions in order to reduce taxable income. Depending on how much money was lost in any given year, it can be spread out over several years or claimed all at once at tax time.
In order to rightfully implement all of the above, you will need the help of an accountant. Without an accountant helping you, you may miss out on all these opportunities and keep paying taxes on the money you should have offset using prior losses.
3. You owe back taxes to the IRS.
If you owe back taxes to the IRS, it is important to pay your taxes on time. The best way to avoid owing late fees is by paying on time every year and keeping track of your payments. If you can’t afford to make your payment in full, there are options available for payment plans with the IRS that will help lower your monthly payments or get rid of penalties.
If an audit comes up, you should always stay calm and present evidence supporting what you have filed. Your accountant can help guide you through this process if needed!
More so, regarding back taxes, I have been helping various clients over the years. I have done this in my capacity as an Enrolled Agent or accountant. Through experience, I have learned that this process is only smooth when you are working with a trained accountant like me. Once you try doing it on your own or consult a particular tax software, expect no meaningful help.
4. You have employees and need to provide payroll and pay payroll taxes.
As a business owner, you have many obligations that go beyond just paying yourself. You need to pay your employees and provide them with benefits and retirement plans. You also need to pay taxes on behalf of yourself, your employees, and the company itself.
Additionally, you need to provide health insurance for all full-time employees or face penalties from the government. If any of these things seem overwhelming or confusing to you personally (and they probably do), hiring an accountant can help relieve some of that stress by ensuring that everything is being done correctly and in accordance with the law.
And in all honesty, you are better off concentrating on running your business and acquiring new customers than worrying about all these intricacies.
5. You need help with COVID-19 loans and grants.
COVID-19 loans are types of loans made available through the Small Business Administration (SBA). They were specifically for small businesses, purposed for various business needs such as maintaining payroll. For example, the Paycheck Protection Program (PPP) loans were meant to maintain the payroll during COVID.
However, these loans came with a number of terms and conditions. Such conditions meant that a business would not face challenges or lawsuits from the government further down the line. But many businesses that applied without the help of accountants are facing challenges. For example, PPP loans were meant to be forgiven, but many businesses could not get them fully forgiven because of failure to comply with one or more rules.
It’s important to hire an accountant if you are in such a mess. Remember, you got into this problem in the first place because of failure to hire an accountant. But it’s evident that some things are better when you take advice from a trained accountant. If you are in any trouble regarding PPP loans or want to see if you can claim the ERC in retrospect, contact me now so we can discuss how I can help you.
6. You recently inherited money or property and don’t know how to handle it.
Inheritance can be a great thing, but it can also be confusing. If you’ve just inherited money or property and don’t know what to do with the funds, contact an accountant like me. I will help you navigate your options for investing and protecting your inheritance by implementing tax strategies that protect your money.
Many black families are not familiar with tax laws that can protect their inheritance. But this is paramount, given that we are still poor in our numbers and are just finding our way out of poverty. It would be great to protect whatever our parents leave us, so we can build from there and multiply the inheritance to become generational wealth.
7. Your company is experiencing fast growth and your existing accounting skills are lagging behind.
If you are experiencing rapid growth, and your existing accounting skills are lagging behind, you need an accountant. You may be feeling overwhelmed by the paperwork involved in managing a business, and applying for new loans and grants. And, you may need help with the IRS.
A financial accountant like me, who is also an IRS Enrolled Agent can help you with this. It is the only way to gain back your peace of mind. As an accountant, I have experience working with small businesses like yours, so even if you don’t have any accounting background yourself, I will be able to guide your company through these financial processes without issue until we get things up to speed again.
Conclusion
An accountant is great at navigating complex financial situations and can help you with the new tax laws, ensuring that you remain compliant with IRS regulations while optimizing your financial position.
Because accounting is a complex field, it is a no-brainer that you need to be working with an accountant. There are many different types of accounts, tax laws, and business structures that need to be dealt with when running a business. This can be overwhelming for those unfamiliar with accounting or those who don’t have time in their busy schedule. Hiring an accountant should provide peace of mind as they will help manage your finances so you can focus on what matters most: growing your business!
Did this article remind you that you need to hire an accountant? If so, contact me and schedule a quick chat. This could be the start of a long, fruitful relationship.
Frequently Asked Questions
- Why do businesses need an accountant?
An accountant looks after a business’ finances and helps when there are growth transitions, such as hiring employees or taking on more office space. They also help with taxes and provide advice to business owners.
- What are the four compelling reasons why an entrepreneur will hire an accountant?
They want help developing a business plan, managing their finances or applying for bank loans, handling payroll and payroll taxes, and handling federal tax preparation and filing.
