The following is a guest post by Omar Adams.
You may be earning just enough to pay taxes, you may be skilled enough to file your returns on your own, and you may know how to use the right software tools to handle the task by yourself, but there are still many reasons why it’s wiser to hire an accountant. Yes, this move does cost you some money, but it’s an expense that’s necessary because paying an accountant can save you money both in the short and long run. If you’re not convinced yet, read on to see how:
- An accountant can tell you what to do so that you stay within the law, yet pay the least possible tax. The knowledge they provide may range from simple issues like telling you that you’re allowed to claim deductions on dry cleaning expenses incurred during a business trip, to complex dealings like asking you to hire your spouse at minimum wage if you own your business – this allows you to set up an insured medical reimbursement plan for her and your kids and deduct contributions to it as a business expense (insurance provision for employees). In general, an accountant who is up to date with tax laws and rules and knows your financial circumstances well can come up with completely legal ways and means to save you money.
- He or she knows what is deductible and what is not; so all you need to do is provide them with a complete set of all your financial records (sorted according to personal and professional expenses and income), and they’re sure to find deductibles that you have been missing (and so paying) all these years.
- If you’re ever in the position of being audited, having an accountant on your side can save you tons of worry and stress. You can rest assured that your accounts are in order and that you’re free of any wrongdoing.
- An accountant helps you figure out exactly how much you need to pay as tax – pay too little and you may owe penalty fees to the IRS; pay too much and you get refund; however, that’s money that could have earned you interest if it was in your account instead of with the IRS.
- A good accountant can help you set up sound financial practices that you can follow to make the most income and pay the least amount of tax using legal methods and ways. He/she can also help with ideas to boost your non-taxable income.
- With an accountant on your payroll, you don’t have to worry about missing the deadline for tax compliance – they’re there to remind you that you need to file your returns (this in turn gets you organized so you’re ready with all that they need in order to prepare your taxes), and they do it for you within the stipulated date. Filing on time is one of the best ways to avoid drawing attention to yourself and risk getting audited.
- Your accountant can also help with planning for future expenses; he or she could suggest tax-free ways to invest your money so that it is saved up for your kids’ education, your dream home, or just medical and other emergencies and contingencies like accidents and sudden death.
- An accountant can offer advice about property and assets that you own – if they’re depreciating assets, he or she can tell you how much you can deduct as tax on the depreciated value. It’s easier to calculate amounts with an accountant at hand when your property is not solely owned or if you just own certain shares in a business or other asset.
- He or she ensures that you’re within the law in all your actions and operations and save you tons of money in fines and also from embarrassment and shame.
- And last but not the least, an accountant helps you become a better businessman by teaching you how tax laws work and how you can stay within them, yet take home most of what you’ve earned that year.
This guest post is contributed by Omar Adams. He writes on the topic of online accounting degree programs. He welcomes your comments at firstname.lastname@example.org.