For businesses in the US, whether it’s a small-scale firm, a medium-sized business, or a large corporation, one of the biggest challenges is tax preparation. Some business owners work on their tax preparation strategy year-round in order to be able to save as much as they can on their taxes. Unless you are a professional yourself, you should consider tax preparer recruitment and find a reputable tax expert to ensure effective tax planning and preparation for your business.
Who is a Tax Preparer?
Before you start looking out for a tax preparer, it's vital to first understand who a tax preparer really is. A tax preparer is an expert who specializes in formulating businesses and individual tax strategies. They are fully trained professionals having in-depth knowledge of the United States’ tax laws and regulations. It is important for tax preparers to stay up-to-date with the state’s constantly changing tax regulations.
The Internal Revenue Service (IRS) is the department that regulates taxation in the US and determines professionals who can practice and represent clients. It also keeps a track of the different types of tax agents, including enrolled agents, CPAs, attorneys, and other tax professionals registered with the IRS offering tax services in the US.
If you are a business owner, you can outsource tax preparation services to a professional tax expert with real credentials and experience, preferably, in the relevant industry to fulfill your unique tax needs.
5 Reasons to Recruit Tax Preparers
Now, why a tax professional is such a necessity? To help motivate you, here are a variety of advantages you'll have if you are using a dedicated tax preparer:
- They ensure that all allowable tax deductions are taken into account for calculation in order to prevent you from unnecessary tax payments.
- A tax preparer helps you with proper choice of entity.
- They keep your business on track by filing your tax within deadlines
- A tax professional advises you on proper filing of disclosures and complicated forms.
- They make sure your business taxes strategy is in line with your individual tax strategy
An experienced and qualified tax professional can assist you with business taxes throughout the entire preparation process. This includes before, during, and after the filing of your taxes.
Should you worry about tax preparation before filing?
Unfortunately, a lot of people don't worry about their taxes until the last minute. It is highly recommended that you plan for them well in advance and, preferably, all year long in order to save more. You should speak to your tax preparer, at least every quarter (if not every month) to make sure that you are properly managing your taxes—in a way that's most beneficial to your business.
As their job requires them to stay updated on tax regulations, your tax preparer can advise you on how to handle any amendments in the law and save more on your tax bill. A tax professional, during the tax preparation process, can manage both your personal and business tax returns. This allows you to coordinate your efforts and increase your tax savings. In the following example, we will illustrate how it’s done and how you can optimize your tax returns.
Let's say a business owner owns two firms and during a year, one of these firms lost money and the other one showed a profit. In this case, first of all, a tax preparer would advise the owner on the firm’s designation. They would also make sure that both firms took advantage of every possible allowable deduction. In addition to that, the tax expert would prepare the owner’s personal return as well as coordinate between the returns to minimize the amount of tax that would be due on the owner. The losses incurred by the first firm would offset the profits of the second, which will result in lower tax liability.
Without a tax expert working for you, in a scenario similar to what we just discussed, you would surely end up paying more. After tax preparation, if your returns are filed, a tax expert can keep you prepped for a potential IRS audit. An experienced tax preparer would be able to advise you on different parts of an IRS audit.
Only a reputable tax professional with the right credentials can represent you in front of the IRS. The IRS has defined several kinds of professionals who are eligible to work as tax professionals. Here are some of them:
- Tax Attorney - A tax attorney is somebody who specializes in both business and individual taxes. A regular attorney might not be up-to-date on business-specific tax regulations, so they are not in the capacity to give you the best advice when it comes to taxes.
- Certified Public Accountant - A certified public accountant is an accounting professional who has passed the CPA exam. If an accountant has passed the CPA exam and carrying the necessary experience and certification requirements, he is capable of offering a wide variety of financial services. However, some of them also specialize in fields like personal and business taxes.
- Enrolled Agents - An enrolled agent is somebody who is qualified to manage taxes and represent a client before the IRS.
Importance of Tax Preparer Training to Grow Skills
Tax laws are always changing and they aren't going away anytime soon. Tax preparers are in high in demand but there's generally a shortage of qualified tax preparers, especially during the tax season, each year—although it is a more simple process to become a tax preparer, a “recession-proof” career, these days. There are no mandatory IRS tax preparer license requirements and only a handful of states have their own preparer regulations. You would be surprised to know that you don't need a college degree or to be a CPA to become a tax preparer. Even lack of accounting knowledge or high-level math is also not required.
So you want to grow your business? Things are going well but you wish it was easier for you to find qualified tax preparers? The trouble is, tax preparers with real experience are hard to find. Of course, you can always put ads but what usually happens is, most applicants know just enough to prepare tax returns for their friends and family, however, they are not as good as they need to be in order to qualify as tax preparers for your company. Therefore, tax preparers require training at regular intervals to upgrade their skills and stay current with the constantly changing tax regulations.
There are in-house tax preparer training and education solutions provided by companies and tax schools to help businesses and individuals with their tax needs. Upgrading your tax preparers means empowering your company to grow your business with turnkey solutions. You have everything you need to not only recruit but train your tax preparers. With live or online classes or a combination of the two, you can create a customized experience for your tax professionals to better meet your tax needs.
There are a variety of ways a tax preparer can help a person or business with their taxes. In most cases, they will save you money and time. Also, they are able to answer your questions and assist you in resolving various tax-related issues. As we all are aware, the tax code is quite complicated and there are often changes with time that you might fail to stay updated with. This is where a tax expert can turn out to be really handy. A tax preparer’s job is to analyze and determine how the different tax verticals affect your working. Working with a tax preparer will give you peace of mind and also prevent you from making costly and frustrating mistakes that put you at risk for an audit of your taxes. In case there is an audit or a possibility for an audit, your tax preparer can help you to better handle it.
It is critical for business owners to have a qualified and experienced tax professional who can advise them on tax-related matters. Not only does choosing the right tax preparer minimizes the taxes you are required to pay to the IRS but it also frees you from a number of challenging responsibilities. Always remember, it's just not enough to get in touch with your tax preparer once every year, you need to be in contact with them throughout to be able to utilize their skills to achieve the best possible results for your business.
Outsource tax preparation services to India
In the above sections, we discussed just how important it is to have a good tax preparer. In case you do not already have an experienced tax preparer onboard, there's no need to worry. It's never too late to consider tax preparer recruitment in order to be able to find a skilled tax expert to assist you with your business or individual taxes. Outsource tax preparation services to India and let your taxes be managed by some of the best tax professionals in the business.