From establishing a corporate structure that maximizes tax savings to advising on a big business transition, there are critical occasions whenever your small business requires the services of a Dallas CPA Firm.
Determining the right time to outsource tasks or handle them yourselves are some of the struggles that a small business owner has, and this is particularly true in the event of a certified public accountant (CPA), particularly if your firm is new or has expanded to an unanticipated size.
While you can easily do day-to-day accounting on your own – especially if you use decent accounting software – or employ a bookkeeper, there are times when the knowledge of a CPA can assist you in making solid business choices, avoiding costly mistakes, and saving time.
Specific Times When Hiring a Dallas CPA Firm Is a Good Idea
You do not have to engage a CPA on a full-time or even part-time basis to benefit from their expertise in corporate finance, since many offer their expertise as consultants.
These are the following instances of why you should consider employing a CPA:
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1. Before You Start Your Business Operations
You may find it excessive to hire a Dallas CPA Firm and pay hundreds of dollars for a few hours when you are about to start a business on just a shoestring budget but, as is the case with many other beginning expenses, this is an investment (and a tax-deductible expense).
A CPA can assist you in establishing your business and avoiding costly blunders. These are just a few of the decisions that a CPA may assist you with when you start your business:
Your Firm Model
The legal form in which you establish your firm – sole proprietorship, partnership, limited liability company, corporation, or co-op – has an impact on your taxes, responsibility, and reporting obligations.
Additionally, it might be challenging to change, later on, requiring you to renew for licenses, obtain a new job identification number, and inform your bank and insurance provider.
The Type of Accounting Structure That Is Right for Your Business
When determining whether to observe the cash or accrual method of accounting, consulting with a CPA can assist you in determining what is the more appropriate accounting method for your firm.
When you initially begin configuring your accounting software, one of the first things it will ask is what form of accounting you employ.
While most new firms utilize cash accounting – since it is simpler – the IRS mandates accrual accounting in some circumstances, such as when you sell items to customers and retain inventory.
The alternative is to use the accrual technique, which involves recording revenue and costs as they are billed rather than as they are received.
2. It’s Tax Season
Certified public accountants (CPAs) can help you organize your tax records, submit your tax returns, and develop strategies to reduce your tax bill for the next year.
Additionally, CPAs can defend you if the Internal Revenue Service has issues about your returns or if you or your firm is audited, which is a crucial factor to consider.
The taxation of a business is distinct from that of an individual; even when you’ve always handled your own taxes, you may want to consult with a CPA if your tax position is complicated.
For example, if you hire staff or sell items to clients in numerous states or countries, engaging a certified public accountant (CPA) to file your taxes may save you both time and aggravation.
There are a variety of different ways in which CPAs may assist you with your tax preparation:
Tax Law Compliance
CPAs can assist you in understanding and complying with tax law changes because whenever there are changes in the tax code, employing a CPA can assist you in determining whether and how the changes in the tax code can affect your business.
Recording Appropriate Deductions
The services of Dallas CPAs can assist you in determining the deductions you are eligible for.
While you want to claim as many deductions as you are entitled to, you also don’t want to claim deductions that are dubious and might lead to a tax-related audit.
A CPA can assist you in determining when you should – and when you should not – claim certain tax deductions.
3. Unique Situations
While running your business, there might be some times when you require the knowledge of a CPA. For instance, if you acquire a letter from the IRS telling you that you are being audited, or even if the IRS just seeks extra information on your return, you should retain the services of a CPA.
CPAs have dealt with the IRS previously and can assist you in responding effectively, providing the information the IRS requires, and resolving the matter as easily as possible. Other circumstances that may necessitate hiring a CPA include the following:
- If you’re considering obtaining a small company loan, a CPA can assist you in determining whether funding suits your long-term goals. They may advise you on the most appropriate sort of loan for your business, calculate the loan’s amount and the implications of payments on your cash flow, and create financial documents for loan applications.
- Whenever there are changes in your personal circumstances that might have an impact on the finances or structure of your firm, then engaging the services of a CPA might be a good idea so that in the event that a business partner who is a member of the family suddenly dies, or if the organization is a marital asset and then you are divorcing, then CPAs can help give you some advice on the tax ramifications of an event, assist in determining the worth of the business, or produce financial statements for a sale.
4. When You Purchase, Combine, Sell or Close a Business
Whenever your organization is undergoing major changes either structural or operational – such as acquiring another company, merging with another, planning to sell or close your business, or if you are trying to decide if the good move could be either to add a new partner or dissolve a partnership, then seeking advice from a Dallas CPA
Firm about the tax consequences for your business and for yourself is a good idea.
If you’re contemplating the purchase of a firm, a CPA may assist you in analyzing its financial records, verifying its assets, and doing due diligence.
If you’re considering selling your firm, a CPA can help you determine its fair market worth and compile financial records and statements.
Once you have a prospective buyer, they anticipate you to have impeccable accounting records and an accurate appraisal – and if you do not satisfy these expectations, you may lose future buyers or receive a cheaper offer.