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Tax Preparation Cost for Small Business:Running a small business can be time consuming and rewarding all at the same time. The real hassle is filing quarterly tax reports, doing employee payroll sheets, and taking care of tax preparation at year end. I decided a few years ago that trying to do my own small business taxes was not worth the time. There are too many rules and regulations that change from year to year which made keeping up with the current year nearly impossible. Even with my Quickbooks Pro software, I still use a CPA to help with the quarterly state and federal filing forms. I get charged roughly $90/hour to use my CPA, but the time saved is well worth it to me. One of the main reasons that people and small businesses use accountants or CPA firms is because the tax codes are too complicated and who wants to get audited by the IRS for making a simple error on your tax filings.
Tax Preparation Cost for Small Business - The fees to file a year end tax return with my CPA varies from year to year depending on how much time is involved, but generally speaking if I have all my paperwork and data in order, it runs me about $500. My quarterly payroll deposits for both state and federal are an additional fee which works out to about $450. I could probably find a cheaper accountant to work with - perhaps at a rate of $50/hour, but I trust the current firm that does my work and we have a good working relationship. A few times a year I forward my Quickbooks file to them and they make updates or corrections where necessary and return the file to me. I have a fairly simple S-Corporation with only myself as an employee. If you thrown in more employees or monthly payroll filings it could easily increase the tax preparation costs. The IRS and state governments are reducing paperwork more and more and now I can file many of my quarterly payments via electronic payments eliminating filling out forms and writing checks.
Filing Federal Tax Returns Through a CPA:The federal tax code changes almost every year and this only complicates matters for small business owners. Each year, in mid-January I get a pamphlet from my CPA that I fill out and it gives them an idea of how organized I am for the April deadline. They give me a quick checklist of documents or data I need to give them and most often I already have all of it stored in my Quickbooks file. The return itself is filed electronically with the IRS - it's all done by my CPA. I get a confirmation notice in the mail that my tax return has been filed with the IRS and I wait for the refund check (if one is due to me). Sometimes I have to make a personal tax payment - considered an estimated tax payment in January if I didn't pay enough payroll taxes throughout the year. I have never had a problem using my CPA and they are always there to help guide me in taking deductions or write offs. If you are not organized and need more time to file, you can always file for an extension and pay your tax bill later (perhaps with penalties so watch out). The turnaround time is only a few weeks if you are due a refund from the Feds. They can either send you a check or have the refund automatically transferred into your bank account. My year end tax return with my CPA is $500.
Finding a Qualified CPA to do Small Business Tax Return:Word of mouth is your best bet on finding a qualified CPA or accountant. When I moved from California to Oregon my brother helped set me up with a local CPA that he worked with and it has been smooth sailing ever since. You want someone who is knowledgeable of all business types - C Corps, S Corps, LLC's, sole proprietorships, etc. Tax laws and regulations differ for all. They should get to know you a bit to learn about your business and how it makes money (or loses money I suppose). They can give you advice on retirement savings accounts, deductions, payroll, and more. They just need to be responsible and file all taxes on your behalf in a timely manner and keep the auditors away from you.
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