Nobody likes tax season, but the work you do now could be the difference between saving money or spending money in the spring.
Annual tax accountants can't help with tax planning because they don't work with you year-round; their job mostly involves recording history. Luckily, there's an option that can actually improve your tax outlook: monthly accounting.
At CSI Accounting & Payroll, monthly accounting has been our specialty for nearly 60 years. This allows us to use a complete tax strategy – tax planning, tax projections, and tax preparation and filing – to not only legally minimize what you owe, but also to help you know what your tax return is going to look like many months ahead of time. Here, we'll answer:
- What is "complete" tax strategy?
- How can tax strategy save me money?
- Why can't an annual accountant help with tax strategy?
"Complete" Tax Strategy
Complete tax strategy needs all three pieces:
- Tax planning
- Tax projections
- Tax preparation and filing
So, what do these pieces look like? We'll use our monthly accounting service at CSI Accounting & Payroll as an example.
Tax Planning
All year long, tax planning monitors your situation to help legally minimize what you owe. Your accountant is an advisor and a sounding board for your business decisions, all in the hopes of optimizing your tax outlook. We even have periodic tax planning meetings to make sure we're on the same page.
Tax Projections
By the end of each tax planning meeting, you'll have a tax projection so you know what your taxes will look like months ahead of time. Projections are essentially estimates of how much you'll owe in taxes. This helps reduce the stress of tax season and gives you plenty of time to prepare for a tax bill that may be larger than you expected.
Tax Preparation & Filing
Finally, we knock it out of the park by preparing and filing your taxes. It's all based on the financial data that we've prepared for you throughout the year. Business taxes are included in your monthly accounting fee, and individual taxes (where the savings are) can be added on at your request.
How Tax Strategy Saves You Money
Tax strategy is the best way to legally minimize your taxes, and a monthly accountant can help you stay on track for that each month. Throughout the year, they can guide you in business decisions to help with tax season, and your dedicated accountant will know your business so well that they may even be able to recommend tax credits.
Also, tax strategy is most beneficial long-term with a professional. Did you know that even if an accountant saves you money on your taxes one year, that can be detrimental to you the following year? Here is an example of how paying more in taxes now might help you save more in taxes later.
Annual Accountants Can't Do Proper Tax Strategy
We've said that only monthly accountants can provide complete tax strategy. Why would we say that if annual tax preparers claim they can do it too? The key difference is that monthly accountants work with you year-round, and annual tax preparers don't. A lot can happen in the course of a year!
If an annual tax preparer can't professionally guide you year-round, then you're not really using tax strategy. Ask them:
- Are they prepared to meet with you regularly to review your books? Do they know what to look for and how to offer relevant advice?
- Will they offer you any tax projections based on current data throughout the year instead of just looking at your past tax return?
- If you call them with a question, will they charge you by the minute for their time? Will they even pick up the phone when you call?
Not a fan of the answers? Then it may be time to rethink your accounting solution. Take the quiz below to find out which one may be best for your business.
Get Started With Tax Strategy for Next Tax Season
The two ultimate goals of tax strategy are legally minimizing what you owe in taxes and being prepared for a potential tax bill.
If tax strategy is important to your business, don't rely on an annual tax accountant. They lack the ability to offer complete tax strategy since they only meet once a year and may not provide ongoing support or advice. They also don't work with current data to offer proper tax projections, and their availability and pricing for assistance may be limited.
Only monthly accounting can provide proper tax strategy: tax planning, tax projections, and tax preparation. By working with a monthly accountant like the ones at CSI Accounting & Payroll, you'll have an up-to-date understanding of your financials, allowing you to prepare for potential tax bills.
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