Frequently Asked Questions
Most Business Owners Overpay Taxes
The accounting industry is unregulated, meaning anyone can file a tax return. Many business owners lose money, while attempting to save money, by using non-certified accounting people who are at risk of filling out tax returns incorrectly, thus costing business owners thousands of dollars annually. You might be overpaying on taxes, contact us to see how we can help you save on taxes, and to put our experience to work as part of your business strategy.
What Documents do I need to bring for Taxes?
Before you prepare your tax return, we’ll provide you with a tax preparation checklist to help you get organized. This tax preparation checklist will help put you in the right frame of mind. Once you are organized and ready to move forward, you will find that everything begins to fall into place. The overall goal of a tax preparation checklist is to help you get everything together before you begin to file your tax return or show up for your appointment with a tax professional.
Why switch from my current accountant?
We’re here to help businesses succeed, which means providing sensible forward-thinking advice based on the here and now. We’ll make sure you’ve got the information you need – exactly when you need it – to help grow your business. Switching accountants is not painful. Your current accountant is legally obliged to provide us with all the historical information we need in a timely fashion – and we’re here to make sure that the process goes through smoothly and efficiently, with minimal disruption to your business.
Do I need an accountant if the industry is unregulated?
Yes. There are many advantages to using an accountant to file your tax returns. The greatest advantage is having your taxes prepared properly, so you don’t end up overpaying. Other advantages include:
- Audit, Compilation and Review of Financial Statements services, which only accountants can provide.
- Business valuation and restructuring advisory services.
It doesn’t matter if you’re struggling or successful, it’s important to consult an expert, especially when dealing with money; the person that can do this best for you is a Certified Public Accountant.
Does my business's corporate year-end tax return need to be filled out and submitted by a Certified Public Accountant?
No. Anyone can fill out your tax returns, however, not everyone can fill out tax returns properly. Thus, we often find an average of $3,000 per client when we go back and look at their three previous year’s filings.
Should I trust all “Tax Preparers”?
No. Many people claim that they can prepare and file your taxes – for a fee. However, they often aren’t properly trained and make errors. Our office routinely sees past tax returns, having errors and missed opportunities usually accounting for a few thousand dollars of tax paid unnecessarily; and in one case we were able to recover a $24,000 error for a client. We cannot stress the importance of getting the right accounting support for your business.
Now that I own my own business, I don’t have medical/dental benefits.
This doesn’t have to be expensive – in fact, as a corporation – it’s an advantage. This opens the door for you to setup a (Personal Health Spending Account), which will allow you to deduct 100% of the medical/dental/vision expenses allowed by the Tax Act as a business expense. This means that you are not out-of-pocket (after tax dollars) and can recoup these costs. Although you cannot pay the expense directly to your provider with company funds, it will only cost (your business) 5 or 10 percent in admin fees to process…and that’s a good thing.
I buy a “Tax-in-a Box” package to do my own taxes every year. Is this okay?
These packages may be convenient, but your business deserves a higher respect. These packages don’t connect what you do in your business and what happens in your personal life. These two areas NEED to be connected and assessed so that you Never Pay Tax Unnecessarily. When doing your taxes we leverage our tax experts’ knowledge to understand the many variables that can play a factor in reducing your taxes.
Does my accountant need to be a Certified Public Accountant?
Yes. We understand saving money is appealing, but if you don’t use a Certified Public Accountant, you may be losing more money if you have to overpay on your taxes. Most business owners try to save money by using so-called accountant firms where none of the staff are certified public accountants. These companies usually mean well, but haven’t been properly trained. It takes years of study in this industry to be properly trained and the smallest mistakes could result in you either overpaying taxes or underpaying. This could lead to eventual issues with the IRS and attract higher interest rates and penalties.
If my accountant is a Certified Public Accountant should I automatically trust them?
No. There are varied designations, including Certified Public Accountant (CPA), Certified Financial Analyst (CFA), Certified Management Accountant (CMA), Enrolled Agent (EA), Certified Internal Auditor (CIA), Certified Information Systems Auditor (CISA), Certified Fraud Examiner (CFE), Certified Government Auditing Professional (CGAP), Certified Bank Auditor (CBA). Each accountant, after receiving their designation, gains experience in a specific discipline – which may not be specific to business tax preparation and filing.
I pay a lot of tax every year – what can I do?
It is imperative to review both the business operations as well as your personal tax situation simultaneously to properly balance the amount of tax you pay in both areas, so you never pay tax unnecessarily. Some of the options we may explore are paying your spouse and paying your kids. Often times they provide infrequent support to your business with no compensation. They should be paid for their “part-time” assistance, and if their tax base is low – they may get all their tax back.
Should I remain a sole-proprietor or should I incorporate?
There are two main reasons to incorporate; one is liability, if your business puts you at risk (your actions may cause damage to property or injury to a person) then there may be a chance that you could be sued for damages; and as a sole-proprietor your personal assets, cash, home and vehicle would be at risk. The second is tax advantage, if your business is achieving sales/revenues above $50,000 yearly then, you’re no longer operating a “casual” business and need to elevate your business posture.
My business is incorporated; do I need a business bank account?
Yes. Any income that is NOT deposited into your business bank account could be perceived as your personal income and would then be taxed at your personal tax rate. A business bank account and its fees are an expense to your business and can be deducted within your business taxes.
Our tax and planning experts will help your business and wealth management to move you forward.
Call us during regular business hours at (212) 661-2720 to make an appointment.