A tax consultant is a special advisor with expertise in tax law, such as a Certified Public Accountant (CPA), attorney, or an enrolled agent (EA). They provide a range of financial consulting services to businesses to comply with current local, state, and federal tax requirements. Additionally, they use this knowledge to help their clients save money on future returns and business dealings.
6 Ways Businesses Can Benefit From a Tax Consultant
1. Organize Tax Planning
Most small-to-medium-sized businesses tax can save money by remembering that tax planning is a year-round process. A tax consultant can examine your company’s tax situation and identify which department should be handling specific obligations to keep this information in order and easy to access. This will prevent the need for hiring additional employees until you’ve comfortably reached the growth to handle additional budget obligations.
2. Minimize Tax Liability
Corporate tax law is complex. A tax consultant has specialized knowledge of the tax code and regularly updates their education to remain current with the latest changes. After setting a plan in motion, your tax expert can provide strategic points throughout the year to help you navigate these waters and minimize what you eventually owe and any risk of being audited.
3. Maximize Benefits & Deductions
Your company could potentially qualify for numerous tax deductions. However, if filing your taxes without an expert, you could be missing many that pertain to your specific industry or personal scenario. Additionally, making new purchases, opening loan accounts, expanding business, and securing new investments can alter your tax implications throughout the year. Your consultant can help you plan these decisions so they don’t end up causing you to pay more taxes.
4. Ensure On-Time Payments
As a business owner, you wear many hats. Sometimes, this might let some duties fall through the cracks. When it comes to your taxes, late payments can result in penalties and fines. After going over your expected income and return obligations, a tax consultant can set up automatic payments to make sure all taxes owed — including sales, franchise, unemployment, and income — are paid on time throughout the year.
5. Handle Audits
Anyone can prepare business taxes, but they are already familiar with your books and legal standing when you have a tax consultant do it. In the event you are audited, they can provide immediate help and represent you to the IRS. This will reduce the risk of mishandling a tax issue that could result in financial and legal trouble. They can also help you make changes to your business structure to prevent the problem from arising again in the future.
6. Year-Round Advice
While a tax consultant doesn’t have to become a full-time staff member, they are an excellent source to have on standby as tax issues come up. As a small business, it can often be in your best interest to have one of these experts evaluate your situation at least once a quarter. This will help ensure you stay on track to file your taxes accurately and avoid any costly mistakes. Their advice will also allow you to make changes as necessary to further the growth of your business.