Home » Top 6 Reasons Small Business Owners Should Hire a Tax Professional This Year
If you learned that millions of people attempt DIY-surgery each year, you’d be shocked, if not outraged, that anyone would take such a risk with something so complicated. Every year, millions of taxpayers choose to do difficult tax preparation on their own, and while this may not endanger their lives, it is a risky endeavor.
Do-it-yourself internet tax solutions will likely work out for taxpayers with the simplest income tax returns. These individuals frequently have only one source of income from a conventional employer, a home mortgage with interest, college loan debt, and sometimes some childcare credits.
Individuals with more complicated incomes, such as business revenue, interest and dividend income, capital gains from the sale of a property, or overseas assets, should seek the advice of a professional to save time, money, and potential legal issues.
There are lots of reasons why consulting a tax professional rather than performing your own ‘tax surgery’ is preferable for small business owners and even most Canadian taxpayers. Here are some of the most important.
Even simple tax situations can become complicated, especially if the person owns or receives money from a business, has children, has recently separated, received income from a Province they don’t live in, or has just moved.
To add to the confusion, new tax laws are adopted every year that affect almost everyone, making it difficult to keep track of changes and how they may affect you. Taxes are much more complicated for small firms that must manage income tax withholding and reporting for their employees.
While tax software can help to a certain extent, an experienced tax professional has “seen it all before” and keeps up with tax law changes through continuing education.
While you may complete your taxes online for $150 or less, many do-it-yourself filers spend an excessive amount of time doing so. The average person spends 13 hours preparing their tax return, according to the CRA.
Hiring a tax professional can cut down on the time it takes. Yes, you’ll still need to gather your tax paperwork, send it to their office, go over a few issues with the pro, and then double-check the final return for correctness. But that will take a LOT less than 13 hours.
If you’d rather spend your time with family, friends, or binge-watching TV in the early days of spring, then hiring a tax professional is the way to go.
Experienced tax preparers know all the deductions you may be eligible for, as well as which items are tax-deductible if you own a business, saving you hours and hours of terribly tedious and dangerous tax guesswork.
Even if you only make a little additional money on the side, a tax professional may be able to uncover deductions or credits that will more than cover the cost of their services and allow you to keep more of your hard-earned money.
You’re considerably more likely to make mistakes if you do your taxes yourself… and those mistakes might cost you a lot of money. Even basic math errors might result in an incorrect return, leaving the taxpayer liable for previous taxes and interest.
Taxpayers may risk significant fines and even criminal prosecution if the CRA determines their errors were not unintentional, such as failing to declare income. Unfortunately, as confusing as taxes can be – and in 2021 there are all kinds of new issues to wade through – ignorance is no defense as far as they are concerned.
Have you ever completed your taxes and been delighted with the amount of your income tax refund, but were unsure about the correctness of the return? Or if a certain deduction or credit was actually applicable to you?
Only CRA auditors look forward to an audit, and the easiest way to avoid their attention is to make sure your tax return is in accordance with the tax regulations. The most effective way to do so is to hire a tax expert who lives, works, and breathes taxes on a daily basis (or at least a lot more frequently than you do).
Any taxpayer can still be audited, but if you engage the services of a professional and your return is chosen for additional investigation by the CRA, those professionals will assist you in representing yourself before the CRA. If you’re going to court, get a lawyer, and if you’re going to the CRA, hire a tax specialist.
Because the taxes you pay this year may have an impact on the taxes you owe next year, it’s best to look at the big picture and plan ahead for the events you may anticipate (kids going to university, buying a new house, business changes, moving house, a marriage or divorce).
Most tax specialists prefer that you meet with them before filing your taxes so that you can take proactive actions to decrease your taxes or minimize other consequences. Many individuals and businesses can save money by attending such a tax planning meeting, and who does not like the idea of that?
Ready to let a tax professional handle your taxes this year, and save time, money and a lot of hassle? Call toll free 855 667 1727 or book an appointment here.