If you don’t know much about tax regulations or have just launched a business, you might consider hiring a pro to prepare and file your taxes.

Business taxes differ from personal taxes and require a thorough accounting of all revenues and costs. You should “always” employ a professional to file your taxes unless you want to risk making a dumb error that might cost you money down the road. Tax preparation can be a complex and stressful task, and making mistakes can lead to financial penalties, delays in refunds, or even legal issues.  Here are the top blunders to avoid when selecting a tax preparer for your company.

Here are four costly tax preparation mistakes to avoid:

Choosing The Cheapest Candidate

Booking a cheap trip isn’t harmful, but can you find an affordable doctor? Similar to that, there is a very significant likelihood that the individual giving you a low price is inexperienced and doesn’t fully comprehend the problem. Look for a person with strong qualifications, experience, and the ability to offer appropriate advice. On the other hand, you ought to avoid anyone who charges a percentage fee determined by the sum of your tax. The cost should only be determined by the time spent and the paperwork/schedules needed.

Working With A Tax Preparer Only During Tax Season

When we have deadlines, we all tend to search for fast fixes. However, if you want to build your company and plan for the future, you must hire a tax preparer. Look for someone who is both a qualified public accountant and a skilled tax advisor (CPA). The tax preparer must verify your financial records for revenue and spending every quarter, reduce company taxes, and aid in future planning.

Using An Unqualified Person

A professional should have a PTIN and be an IRS-enrolled agent or certified accountant (Preparer Tax Identification Number). Make sure you get certifications and documents, or better yet, seek assistance from other companies in your neighborhood and see who they suggest.

Employing A Defensive Person

Most CPAs and tax preparers work to uphold their reputations by putting your business in jeopardy. Choose a tax professional willing to take the initiative and assertively take the necessary actions to guarantee that you pay the minimum taxes required by law. Asking, “What’s the least I need to pay for my legally accepted business?” should be your plan.

We hope that these pointers will assist you in ensuring that you select a tax preparer for your company who is both professionally capable and helpful. Call us today!

Filing Incorrect Information:

Providing inaccurate information, such as your Social Security Number, income, or deductions, can lead to serious consequences. Errors can trigger audits and result in penalties and interest on unpaid taxes.

Solution:

Double-check all your information, use official documents (e.g., W-2, 1099), and consider using tax preparation software or hiring a professional tax preparer for accuracy.

Missed Deductions and Credits:

Failing to claim eligible deductions and tax credits means you might overpay your taxes. Commonly missed deductions include educational expenses, medical expenses, and charitable contributions.

Solution:

Stay informed about available deductions and credits, keep detailed records of expenses, and consider consulting a tax professional to help you identify all eligible deductions and credits.

Math Errors:

Simple math errors, such as addition or subtraction mistakes, can lead to discrepancies on your tax return and trigger IRS inquiries. Incorrect calculations can result in overpaying or underpaying taxes.

Solution:

Use tax preparation software, a calculator, or hire a tax professional to ensure all mathematical calculations are accurate.

Filing Late or Not Filing at All:

Filing your tax return after the deadline or failing to file at all can result in penalties and interest on any unpaid taxes. It’s essential to meet the tax filing deadline, which is usually April 15th in the United States.

Solution:

Set a reminder for the tax filing deadline and consider filing for an extension if you can’t meet the deadline. Keep in mind that an extension grants extra time to file your return but not to pay any taxes owed.

In addition to these mistakes, it’s crucial to keep thorough records of your financial transactions, report all sources of income, and be aware of changes in tax laws and regulations that may affect your return. If you’re unsure about how to prepare your taxes accurately, consider seeking the assistance of a qualified tax professional who can help you navigate the process and minimize the risk of costly mistakes.