Since my business is a sub-s corporation, I have to file both company and individual tax forms. In my 12 years of business, I’ve tried a number of different approaches to tax preparation.
I started out using a CPA, then I went to doing it myself using online software, then to a regional, lower cost tax preparation firm and for the last 2 years, I’ve been back with a CPA firm. Using a CPA firm does cost more, but for me it’s worth the peace-of-mind of knowing that it’s done correctly.
Another benefit of using a CPA firm is that they have people in-house who are experts in different accounting software. I use Quickbooks for my accounting. When I did my tax returns on my own or even when I used a regional tax preparation firm, it was up to me to make all year-end entries in Quickbooks.
Needless to say I was pretty much clueless when it came to what should be entered. That meant I had to spend a good deal of time researching & trying to figure it out. Time taken away from the core functions of my business. Time spent doing something I wasn’t good at and hated doing. So for me, using a CPA firm is the best choice. I simply make an “Accountants Copy” from Quickbooks and put it on a flash drive. Then they make all necessary entries, give it back to me and I upload it. Viola. Totally worth it in my book.
Everyone’s business and needs are different. You have to explore the various options available and find which is best for your individual situation.
If you do decide to hire a professional tax preparer, whether a CPA firm or not, you still have the challenge of finding the right one. When I first started my business, I asked other small business owners who they would recommend. But I wasn’t happy with the first CPA firm because it turns out they really weren’t interested in businesses as small as mine.
My mistake at that time was not asking other solopreneurs who they used. This time around, I’ve been able to find a firm that makes me feel like an important client and has a fee structure that’s appropriate for my size business.
If you’ve just started your business or are thinking about making a change when it comes to your taxes, December is a good time to do your research and make a decision. Come January, tax preparers start getting very busy and have less time to have ‘informational’ discussions with you.
Inc. Magazine has a good article that discusses some tips on how solopreneurs can find the right tax preparer. You can read it here.
How do you currently handle your taxes? Do-it-yourself with software, local tax preparer or CPA firm?