7 Things Your Accountant Won’t Tell You
Now before we get into this, I have want to be clear, I am not out here to stop your accountant’s money flow. Everybody’s got to eat! What I do want to do is educate you on some simple things you can do and look out for to keep from spending extra $$$$$.
You Don’t Need Them to Help You Register Your Business:
I’m always shocked when I hear someone paid extra to file their business. I know many people find it challenging to know where to start, but for a new business the extra money paid to an accountant, attorney, or an online service is usually not necessarily. The vast majority of side hustles and small businesses can become legit with a few clicks on your Secretary of State’s website.
You Don’t Have to Use Quickbooks:
Many businesses (and households, but that’s another story) suffer because they don’t keep tabs on their income and spending. It’s wise to have a systems to keep account, but don’t feel compelled to use Quickbooks right off the bat. Something as simple as google sheets may work for your depending on the size of your business.
Get your own EIN - it’s free:
Related to point one. This is another service accountants will sometimes charge you for. The EIN serves as a social security number for your business. The whole process takes about 10 minutes and is free from irs.gov.
You May Owe More than Income Tax:
A large majority of small business owners and side hustlers get excited about the prospect of multiple revenue streams, but forget that Uncle Sam isn’t the only one trying to get paid. State and local governments also have their own taxes that you want to be aware of. Talk to your tax professional to make sure the specifics of your business are covered.
You Probably Can Deduct More Than Your Realize:
This is a tricky one, but it should be noted that some things you purchase for your business can come with a serious tax write-off. No, you can’t write off Sparky’s dog food (unless you’re a dog walker :)), but things like cell phone bills, a portion of your rent, employing your child, and even an entire car can generate serious tax deductions! It’s better to keep a record of everything and work with your tax preparer than to automatically assume that you can’t.
Seasonal Tax Offices May Not Be Your Best Option:
Shouts out to the H&R Block’s, Jackson Hewitt’s, and Liberty Tax offices all across the world. We salute you. These places have been staples in all of our neighborhoods as long as we can remember and some of us may even frequent them come tax time. While they’re a great option for people with straightforward situations, you may find that they can be lackluster when it comes to small businesses. The vast majority of the tax preparers that work there have likely gone thru at most a 12 week crash course. While some people have a background in the business (spoiler alert: I woRked at Liberty Tax for a season) many folks are there looking for a couple extra bucks and don’t know as much as you may think. If you decide to go this route, come prepared to guide the process and have your documentation ready so you can get max level tax benefits. And this leads me to my last point…
Not every accountant is accredited.
Listen, I’m here for people wanting to make some extra cash and the good thing is that starting a bookkeeping or tax business is relatively easy. The bad thing is that it’s relatively easy. Therefore, you want to make sure that whenever you select a professional to do your business accounting that they are more than capable to meet the demands. Don’t be afraid to walk away if they don’t meet your needs. Ask questions, ask if they have references or referrals. A good accountant will be willing to work with you to demonstrate their expertise and value. Still need more guidance? Check out my post on “questions to ask when hiring an accountant.
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