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Many business owners, without an in-house accounting department, turn to small business tax services each year. These tax service companies, usually small businesses themselves, have a wealth of knowledge and experience in locating the best deductions and minimizing tax burden for a small business. Trying to get the biggest deduction is not the only consideration, though. The best service will offer peace of mind in addition to a big refund.
#1 Licensing
Who is actually filing your taxes? Is the individual a certified public accountant? Or, does the firm employ unlicensed individuals who have simply studied accounting in the past. These are important questions to ask because they will give you insight into the level of proficiency you can expect. You also do not want to be charged at the level you would pay a CPA when you are simply working with an inexperienced associate. With any accounting firm, you should check to see the business is in good standing with the Better Business Bureau. The firm should be licensed and insured; if a firm has lost its license or is not currently insured for liability issues, you can take this as a red flag for past misdoings.
#2 Expense
You have to consider the cost of hiring outside help against a few factors: one, the actual bill you will receive; two, the amount the firm will save you in deductions; three, the opportunity cost you would face by using another option. Opportunity cost is a term that describes the dollar figure for the time it would take you to file the taxes yourself. You may also be able to quantify the peace of mind you receive by having a professional accountant handle your taxes instead of wondering if you did everything right. Finally, consider how much it would have cost you to have an in-house accountant this year.
#3 Guarantees
What can the firm promise you? Is there a guaranty that your tax return will go through without any hiccups? If there is any question about your return, will the company address the question free of charge? What will the firm do for you if an audit does occur? These are all questions to ask before you get started. It will serve you well to have a guaranty on your taxes so you can go back to the firm if anything goes wrong without having to write them another big check.
#4 Ongoing Annual Services
Filing your taxes is easiest if you do not wait until the last minute to get your information together. Consider ways you can pre-plan for tax season during the entire year. Can the service you are working with help track your expenses as you go along? This would minimize the amount of time you will personally spend copying and savings receipts, entering items into your ledger and closing out your books each month. Consider a tax service that has a small monthly fee for bookkeeping services. Your whole tax process can be automated in this fashion, and you will have greater protection in the face of an audit.
