A recent study conducted by Smart Asset listed the cities in the United States with the lowest startup costs. Included were the costs like office rentals, utilities, and accounting fees. Yep, you read that right, they included accounting fees as a business startup cost.
There is a lot that of financial responsibility that comes with owning a business. In order to make sure everything is done correctly from the beginning, working with an accountant is crucial to the financial success of a new business. Here are seven reasons why anyone considering a startup should hire an accountant:
Choosing the best business structure
It’s important to know, before filing taxes, what your business type is. Is it an s-corp? A partnership? How you classify your business is crucial to how you file your taxes. An accountant can help you select which is right for you.
Once you’ve selected your business structure, an accountant can help you fill out the necessary tax forms. Depending upon the business, you may need to apply for an Employer Identification Number (EIN). You also
Each month it’s important to compare your financial records from your business to those from your bank account(s) and credit card(s). If a tricky mistake occurred, an accountant is best qualified to handle this situation.
Once you become a business owner, you should expect to have quarterly estimated tax payments. Without an accountant, it can be tricky to figure out how much one should pay each quarter. If a business owner underpays or misses a payment, they may incur penalty charges.
Rather than scrambling during tax season to maximize your deductions, an accountant can identify your options beforehand. There are many ways business owners can use expenses to reduce taxes owed. For example, your home office can be used as a deduction if used for work. By consulting an accountant, business owners can avoid missing out on simple deductions.
Make sure you get paid
It’s important to make sure you, yes you, as the business owner takes a salary. Although it may be modest in the beginning, including your salary is important when creating a budget. It’s also important when it comes to tax season as it may offer a tax break.
Profit comes first
New business owners typically don’t prioritize profitability. This leaves them too focused on how much they’re spending. By allocating a certain percentage for profit, business owners will then spend less on expenses. This will also ensure business owners have a better idea of how well their business is doing.
All in All
Starting a business is scary at first, but working with an accountant can greatly reduce the stress. While it may seem as though an accountant is reserved for businesses ‘rolling in the dough’, all business owners can benefit from advice from a professional.
Are you considering or in the process of starting a new business? If you have any questions or would like to schedule with us, click here.