How Business Tax Services Can Save You Money

Do you know the U.S. tax code’s page count? The hyperbolic claim that it was 70,000 pages long likely isn’t accurate, even if you used really big font when printing it out, but many reliable sources cite numbers in the 6,500 to 9,000 page range.

From a business owner’s standpoint there may as well not be a difference between 70,000 and 6,500 pages – either way you’re not going to take the time to read it front to back – much less absorb it and remember all the rules. Very few people will attempt that herculean task.

The point is the U.S. tax code is complicated – and business owners don’t just need to worry about complying with the U.S. tax code. There’s also the Arizona Department of Revenue to worry about, not to mention the tax codes of any other states in which you operate.

The complexity of the tax code means a few important things for business owners:

• Amateurs can and do make mistakes
• Those mistakes sometimes turn into IRS audits
• IRS audits are financially and psychologically painful and tedious
• There are lots of potential loopholes, credits and deductibles for which you likely qualify
• Chances are you aren’t familiar with all the ways you could minimize your business’s tax burden

Most SMB owners and managers are smart people. That’s how they got to where they are. Whether you’re a lawyer, doctor, chef or real estate agent – your expertise likely isn’t the tax code.

Avoiding Mistakes

There are a lot of common pitfalls that can lead businesses and business owners to get audited.

You might try to deduct a suspicious number of expenses. Business owners frequently run into problems when they start taking an inordinate number of deductions compared to similar businesses in their industry. If most business owners in your tax bracket are taking 10 deductions but you’re claiming 150, it might raise red flags.

A lot of business owners end up going the other way – they don’t deduct legitimate expenses because they fear an audit. A CPA experienced in tax preparation can help ensure you make the most of our deductions and have the documentation to back them up.

Some of the most common deductions that get small business owners in trouble are:

• Business travel deductions
• Home office deductions
• Mileage deductions

Professional Business Tax Preparers Can Make the Most of Your Business Tax Opportunities

There are legitimate reasons to remain an LLC or sole-proprietorship for as long as possible, but there are also some compelling reasons to incorporate. Some of the tax benefits of forming a C Corp include:

• If you don’t take regular dividend distributions, you can shield yourself from more income tax burden
• Your fiscal year doesn’t have to coincide with the calendar year, allowing for flexibility on which tax years you’re taking losses or profits
• Easier to retain earnings within the company (unlike S Corp profits, C Corp profits won’t appear on your personal tax return)
• You can be a salaried employee of your C Corp and you can deduct payroll taxes
• You could pay shareholders/employees enough that there’s minimal taxable profit at the fiscal year’s end
• You could write off a lot of benefits as long as they’re available to every employee
• Charitable contributions are deductible, and they can be carried over (for now)
• The IRS is less likely to scrutinize a new corporation that has operating losses for the first few years (even if you carry the losses over)

Your professional business tax preparer and CPA at H&H Accounting Services will catch the things in your taxes that might raise eyebrows at the IRS. If you had a great year, got big new contracts or invested in a lot of new equipment, there may appear to be “irregularities,” even though all you were doing was dominating at business.

Experienced business accountants can identify things that might cause problems and proactively get together documentation to head off potential audits of your business.

Keeping Your Money and Your Business’s Resources Where They Belong

Our business tax preparers in Phoenix truly believe our clients deserve to keep as much of their income as possible, and that their businesses should be able to reinvest and grow without being hamstrung by avoidable over taxation.

We also recognize how much you want to avoid time consuming and expensive audits.

Our detail-oriented team of tax preparation professionals will perform the due diligence and thorough accounting necessary to help your business thrive. Call us at (480) 561-5805 for a free one-hour consultation – we’ll come to you!