| Choosing the right tax preparer for your business is a | | | | my new computer? |
| decision best not left until April. A former tax preparer | | | | You have to know enough about taxes to be able to |
| and small business mastermind offers insights into the | | | | read your return intelligently so you know what you're |
| secret world of tax preparers. | | | | signing. You also need to know enough about taxes |
| 1. All tax preparers are not created equal. | | | | so you know what your tax preparer needs to know |
| It stands to reason, somewhere in the country is the | | | | to prepare your return accurately and to your best |
| Worst Tax Preparer. The bad news is you may have | | | | advantage. |
| already booked your appointment with him. Preparing | | | | And don't get your education from your buddies. I |
| taxes is a complex activity. So complex that many of | | | | heard a lot about these "special deductions" you can |
| us simply throw in the towel, pack up our receipts, and | | | | take. Usually the information is not based on facts or |
| head for the nearest tax office. When you arrive at | | | | tax codes. It's a conglomeration of bad information that |
| the office, you fully expect our tax preparer to be | | | | can get you into tax trouble. |
| highly competent and completely vested in getting you | | | | 4. Your tax preparer shouldn't be the one telling you |
| the best deal in town. | | | | how your business is doing. |
| Back in my tax preparing days, I worked for one of | | | | It hits them hard. They couldn't be more shocked if |
| the big name tax preparation franchises both as a | | | | you'd hit them upside the head with a dead fish. "I owe |
| preparer and as a tax return editor. I worked with | | | | how much!", they gasp. "How can that be? I don't have |
| seasoned professionals and total neophytes. I well | | | | any money!" Then the desperation sets in. The tax |
| remember the first time I stepped up to the plate as a | | | | preparer is accused of not doing a good enough job. |
| new preparer. I was terrified. Terrified the customer | | | | "You must have missed something." Or, they dig deep |
| would know I was inexperienced. Terrified I'd make a | | | | trying to think of anything, anything at all, that can lower |
| huge blunder and the customer would pick up on it. | | | | their tax liability. "Did I mention that vacation, I mean, |
| Terrified the more experienced preparers would laugh | | | | business trip I took to the Caribbean? That's deductible |
| at my mistakes. | | | | right?" |
| I quickly realized that as inexperienced as I was, I still | | | | If the only time you know how your business is doing is |
| knew way more than my clients did. And because the | | | | on April 15th, you're doing yourself a huge disservice. If |
| franchise had great systems, others would be | | | | you're not tracking your tax liability and making plans to |
| checking and re-checking my work so my mistakes | | | | satisfy that liability, you're in for a very long, painful, |
| and oversights would be caught before I did any | | | | tortuous lesson delivered at the hands of the Internal |
| damage to the client. | | | | Revenue Service. You will pay. You will pay way |
| As a tax return editor, I saw and corrected more | | | | more than if you'd planned ahead. And it will take you |
| mistakes than you would feel comfortable knowing | | | | forever to get caught up. |
| about. Which brings me to a very important point, tax | | | | 5. Why getting your tax return prepared shouldn't be |
| preparation is not a cut and dried, read the manual, do | | | | an errand you run on your lunch break. |
| the formulas, follow the instructions, and poof! you're | | | | I was in a client's office one day getting her books |
| done kind of activity. The tax codes in this country are | | | | closed out for the year so she could have her tax |
| complex and open to interpretation. | | | | return prepared. I overheard a woman in the next |
| Tax preparers have a wide range of experience from | | | | office telling someone, "I'm just going to run out and get |
| none to grizzled veteran. They also span the | | | | my taxes done." I was horrified. Having your taxes |
| continuum from ethical to completely fraudulent. The | | | | prepared is not something you just "run out" and get |
| more complex your return, the more you need a | | | | done like an oil change. Good tax preparers are like |
| veteran preparer. And if your preparer tells you about | | | | good hair stylists. They have followings. People |
| this great deduction that you can take and it sounds | | | | pre-book them. |
| suspicious to you, listen to your intuition. It's the | | | | If you just "run out" and have your taxes done, who do |
| difference between paying a little bit now or paying a | | | | you think you'll get as a tax preparer? The best and |
| whole lot later. | | | | the brightest? Hardly. You'll get the first year preparers |
| 2. Tax preparers are not business experts. | | | | who haven't built up a following. The ones who are |
| The only business experts in the world are those who | | | | fresh out of tax class and generally have no |
| are running successful businesses. Tax preparers are | | | | experience preparing tax returns or running a business. |
| trained to understand taxes. They're trained to know | | | | The ones who don't have the expertise to know the |
| the proper forms and deductions. They're trained to | | | | ins and outs of interpreting tax codes to your best |
| help you with tax planning. They are not trained to | | | | advantage while still keeping you within the law. Sure |
| understand how business works. | | | | everyone deserves a chance to gain experience but |
| Now, you may have a tax preparer who is also a | | | | do you really want to be the first patient a surgeon |
| successful business owner. Many CPA's, accountants, | | | | operates on? |
| bookkeepers, and tax preparers do run their own | | | | 6. Procrastination is your worst enemy. |
| businesses. They're in a much better position to help | | | | It's April 14th. You think you probably should get your |
| you with your taxes because they understand the day | | | | tax stuff together pretty soon. So, you work late into |
| to day challenges of running a business. | | | | the night, gathering receipts, pawing through stacks of |
| Understand that having your taxes prepared by a big | | | | paper, digging under the seat of your car until finally |
| name franchise, although it does ensure that your | | | | you've got everything you need. Off you go on your |
| return is accurate, does not mean that your return is | | | | lunch break on April 15th to get your return prepared. |
| prepared in a way that is best for your business. Only | | | | Your tax preparer, who has been working at a |
| a preparer who understands business can prepare a | | | | feverish pitch for weeks, has deep circles under her |
| return that works for your business. | | | | eyes, her hands are shaking from lack of sleep and |
| 3. Hiring a tax preparer doesn't mean you're excused | | | | too much caffeine, and you notice a small stream of |
| from understanding taxes. | | | | drool running down her chin. "Oh look," she exclaims |
| I've seen it so many times. I sit down with a client to | | | | laughing maniacally, "Another return!". And you think to |
| talk about finances or taxes. As I talk, the head is | | | | yourself, "What's her problem?". |
| nodding, the mouth is saying, "uh huh, uh huh", but what | | | | You, my procrastinating friend, are her problem. Now |
| they're really focused on is the pen in their hand. They | | | | she's got to frantically race around trying to keep you |
| don't want to understand, they just want to sign off on | | | | out of trouble because you didn't have the courtesy or |
| the paperwork and be done with it. "That's what I hire | | | | forethought to be prepared well ahead of the deadline. |
| you for", they say. | | | | And then she'll have to listen to you whine because |
| Big mistake. I could be sentencing them to time in a | | | | now all of a sudden you have to come up with |
| federal prison. Trusting someone else to the point | | | | thousands of dollars that you didn't know you owed. |
| where you abdicate all responsibility and have no | | | | Do yourself a favor, get your return done early. If you |
| knowledge of what you're signing or what is being | | | | owe money, you don't have to send it until April 15th. |
| done in your name is a recipe for a big fat slice of | | | | At least you'll know that your return was prepared by |
| disaster. That's how embezzlement happens-I trust | | | | a tax preparer who wasn't fatigued, you'll know ahead |
| Mary completely. Bob always takes care of that. And | | | | of time what you owe, and you'll have it off your mind |
| it's also how business owners end up in trouble-What | | | | so you can focus on other important things. Like |
| do you mean he took a deduction for my Chihuahua | | | | getting your oil changed on your lunch break. |
| as a guard dog? Hey, why didn't I get a deduction for | | | | |