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Small Business Tax Advice vs. Tax Planning Strategies

April 16th, 2024 | 5 min. read

By Bryan Cremeen

When small business owners think about taxes, they mostly have one thing in mind: to owe the smallest amount legally possible. 

To do this, they seek out professional tax advice, planning, and strategies – but what are the differences between these three things, and do they all offer the same value?

At CSI Accounting & Payroll, we’ve worked with small business taxes for over 50 years. In all that time, we’ve talked to thousands of small business owners who have asked us about these tax-saving methods:

  • What is tax advice? Why is this all that annual tax accountants can offer?
  • What is tax planning? Why does this fall flat with bookkeeping services?
  • What is a complete tax strategy? How can monthly accountants achieve this?

What is Tax Advice From Annual Tax Accountants?

Tax advice can vary because it comes in two forms: one-off and year-round. (We’ll discuss one-off tax advice here because year-round advice is a critical piece of tax planning and a complete tax strategy, which we touch on later in this article.)

Often, one-off tax advice is all that annual tax accountants can offer. Why is that? When small business owners work with an outsourced tax service, they have only a short time to complete their annual taxes. Due to the limited timeframe, these accountants can’t offer year-round support. 

A tax accountant can only meet with you annually to record the history of your prior year. If you’re lucky enough to get advice, they’ll advise for the entire upcoming year based on that historical data since they likely won’t talk with you again until next tax season.

While this form of tax advice is extremely limited, it’s an affordable option for many small business owners.

What is Tax Planning From Bookkeepers?

Tax planning is more long-term than tax advice and also consists of tracking certain things – such as employee tips – throughout the year. (Tax planning is also a critical piece of a complete tax strategy, but we’ll touch on that later in this article.)

So, since bookkeeping services work with your books year-round, can they help with some tax planning? Not quite, even though some may claim to.

Tax planning falls flat if your bookkeeping service and tax service aren’t under the same roof. That’s because communication of tax strategies between the two parties falls on you – so there’s no guarantee of effective execution.

This is another accounting solution that’s very limited but can be a good option for newer small businesses. However, it certainly doesn’t offer the tax savings that a complete tax strategy does!

What is a Complete Tax Strategy From Monthly Accountants?

A year-round, complete tax strategy consists of tax planning, tax projections, and tax preparation – with as much advice (always based on current financial data) as you want. It results in minimized taxes year-over-year, insight into what your tax bill will look like months in advance, and the freedom to focus on doing what you do best: growing your business.

Despite any claims otherwise, neither bookkeepers nor annual tax accountants can provide a year-round, complete tax strategy – only monthly accountants can. Why is that? Annual tax accountants don’t work with you long enough to provide this, nor is there enough communication back and forth with bookkeepers if they don’t work under the same roof. 

Luckily, there’s a solution that combines bookkeeping, taxes, and consulting all in one service: monthly accounting. This is our specialty at CSI Accounting & Payroll. Monthly accounting removes the need to work with a bookkeeper and an annual tax accountant – and the cost to file your taxes is included in your monthly fee.

Work With a Monthly Accountant for a Complete Tax Strategy!

Now that you know about the advice limitations of annual tax accountants, the planning limitations of bookkeepers, and the complete tax strategies of monthly accountants, are you ready to check out monthly accounting services?

If so, please consider CSI Accounting & Payroll! To see if we can be a good fit for your business, click the button below for a free consultation:

Not ready to talk? That’s okay! First, learn more about the advice a monthly accountant can offer by clicking the image below:

Bryan Cremeen

Bryan joined CSI Accounting in 2019. He joined the team after CSI purchased his accounting firm, AccountSource LLC, which he had owned since 2005. He graduated from St. Cloud State in 2001 with a Bachelor's Degree in Accounting and has been an Enrolled Agent since 2010. Before owning his own accounting practice, Bryan had worked at the State of MN handling financial reporting and had been in private industry as a Controller. His primary responsibilities include overseeing the accounting department and making sure clients are receiving quality service. Fun Fact: Bryan has played soccer since the age of 4. He still plays soccer year round through various adult leagues and is an avid supporter of the Minnesota United MLS soccer team. COYL!!! (Come on, you Loons!!!)