Does your small business generate a large amount of income? You may want to hire an accountant to help keep track of your financial records to make sure they are accurate when filing taxes, as inaccuracies can lead to Internal Revenue Service (IRS) trouble. Below, are the benefits of having a small business accountant and how bad record keeping can lead to an audit by the IRS.
What are the Benefits of Hiring a Small Business Accountant?
Hiring a small business accountant is beneficial because he or she will be precise at calculating numbers due to having the right kind of education. The accountant will keep detailed records of how much profit your business is bringing in on a regular basis and file them away until tax season arrives. You can view the records at any time you desire.
The accountant can also keep records on how much you are paying employees if you have any. Keeping track of payroll is vital when running a business because what's paid must be reported to the IRS. Payroll tracking can also help you avoid paying your employees too much money, or even too little.
You can expect to pay a small business accountant up to $400 plus an hour on an average. However, the overall price will depend on what you need the accountant to do and who is hired. An accountant is a great asset to your business because he or she can help you avoid an audit for the IRS, or have accurate records in case of a random audit.
How Can Bad Record Keeping Lead to an Audit by the IRS?
All it takes is one discrepancy in your tax documents to set off an IRS audit for your business. You will then be obligated to explain in detail why your tax documents are not accurate, along with providing the appropriate proof. The IRS will usually give you a specific amount of time to prove that you are not fraudulent, which an accountant can help you prove your innocence. Bad records can lead to you being charged a fine or spending time in jail.
You have a better chance of getting through tax season without a problem if you have accurate financial records. However, a random audit can take place when you least expect it, so you must be prepared. Hire a small business tax accountant, such as Don Lamb CPA Inc P.S., to get the peace of mind that your financial records are on point.