Hiring a Tax Consultant

Professional tax advice can help set your mind at ease

Digging into tax matters is like pulling tissues out of a box — each paper you grab has another one connected to it, and before you know it, you're up to your knees in paper and feeling sicker than ever. While some business tax situations are straightforward, at other times you're better off relying on an expert for advice and know-how. A good tax consultant can:

1. Help you determine which business form will be best for your company, if you're just starting up
2. Tell you which taxes are due when and set up systems that will automate the process.
3. Help you determine what qualifies as "gross income," which is what the IRS cares about.
4. Keep you updated on changes to the tax code and on which expenses qualify as business deductions.

Find a tax consultant online

Whether you just want someone to double-check your tax forms once a year or someone to track every dollar that flows in and out of your business, a tax consultant can handle the job.

Tax software: Your "tax consultant" in a box

Today's sophisticated tax and accounting software for small business functions, in part, like a tax consultant. Most programs include information on common small business tax issues.

Consider the tax angles when choosing a business form

When you get started, you can set up your business as a sole proprietorship, a partnership, a limited liability company (LLC), or an S- or C-corporation. Do you know the tax advantages and disadvantages of each form?
different business entities and choose the one that fits your financial situation best. If you're not sure, ask a CPA for advice. Find one at CPAdirectory.com.

Avoid - or allow for - an audit

The most dreaded words for any business owner to hear are "You're being audited." Something suspicious has turned up in your tax filings, and now you have to meet with an IRS agent to go over your deductions with a fine-tooth comb.

• Open a separate bank account for your business so that you can keep those funds apart from your personal assets.
• Depending on your business structure, you can set your own tax year, which may make filing easier for you.
• Maintain a tax calendar so that you know which taxes are due when.
• Some industries have special tax incentives due to different state and federal government initiatives. Find a consultant with experience in your industry if possible.
• The bottom line: No matter who gives you advice, you are responsible for your tax return, so don't follow someone's shady advice if you can't accept the consequences.

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