Small Business Tax Accounting: Can You Do It Yourself?

Starting a business seems easy if you’re only skimming how-to guides, but anyone who has ever tried doing it knows that it involves a lot of planning.

It also requires making critical financial decisions and making sure all legal activities are taken care of. That’s why if you choose to get help from a lawyer or an accountant, only a few would think that’s a bad idea.

Let’s say, though, that you’re one of the few who think that way. Or maybe you have hesitations about hiring an accountant. If that’s the case, let’s talk about small business tax accounting and what you can expect if you choose the DIY route versus hiring an expert.

DIY Small Business Tax Accounting: It’s Okay, Right? 

When setting up your company, a business accountant can help you write a business plan. They can also give tips and advice on the best business entity structure.

A tax accountant can also help you get all the appropriate licenses, like sales tax permits and so on. They can also help you use bookkeeping software. 

Yet, some business owners opt to end their relationship with a small business tax accountant after getting through those startup requirements. They believe they can DIY their accounting once their business is up and running. 

Here’s the thing, though: not hiring a tax accountant is only okay if you consider your business a hobby. It’s also not a problem if you’re a freelancer or if your business is a sole proprietorship. Tracking income and expenses is reasonably straightforward in all these cases, so opting for the DIY accounting route isn’t a problem.

Why Work With a Company Tax Accountant Year-Round? 

After launching your business, you should still consider working with an accountant. That’s because you never know what issues could crop up once you start growing your company.

For example, you’re thinking of expanding your business internationally. Having an expert on sales tax compliance would help a lot. If you’re also hiring more people, you’ll need help with payroll and ensure wage and labor compliance requirements are followed.

The good news is you don’t have to hire an in-house business accountant. You can work with them as needed, but don’t wait until it’s already tax time. It’s better to meet with your accountant before the end of the year to ensure any compliance issue is fixed before it’s time to file your report. 

Tip: If you need a business accountant, consider someone committed to continuing their education. You can ask potential candidates if they take online CPE courses to gauge how serious they are about evolving their skills.

Don’t Let Tax Issues Get In the Way of Business Growth

Small business tax accounting can be a DIY thing, but only for specific situations. These include self-run businesses that don’t have complicated tax issues, hobbyists, and so on. 

However, if you plan to grow your business, hiring an accountant will be one of the best decisions you’ll ever make as an entrepreneur. 

For more business tips and advice, don’t forget to check our other posts.

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