6 Surprising Truths About Tax Preparers

6 Surprising Truths About Tax Preparers

Page 2

Understand that having your taxes prepared by a big name franchise, although it does ensure that your return is accurate, does not mean that your return is prepared in a way that is best for your business. Only a preparer who understands business can prepare a return that works for your business.

3. Hiring a tax preparer doesn't mean you're excused from understanding taxes.

I've seen it so many times. I sit down with a client to talk about finances or taxes. As I talk, the head is nodding, the mouth is saying, "uh huh, uh huh", but what they're really focused on is the pen in their hand. They don't want to understand, they just want to sign off on the paperwork and be done with it. "That's what I hire you for", they say.

Big mistake. I could be sentencing them to time in a federal prison. Trusting someone else to the point where you abdicate all responsibility and have no knowledge of what you're signing or what is being done in your name is a recipe for a big fat slice of disaster. That's how embezzlement happens-I trust Mary completely. Bob always takes care of that. And it's also how business owners end up in trouble-What do you mean he took a deduction for my Chihuahua as a guard dog? Hey, why didn't I get a deduction for my new computer?

You have to know enough about taxes to be able to read your return intelligently so you know what you're signing. You also need to know enough about taxes so you know what your tax preparer needs to know to prepare your return accurately and to your best advantage.

And don't get your education from your buddies. I heard a lot about these "special deductions" you can take. Usually the information is not based on facts or tax codes. It's a conglomeration of bad information that can get you into tax trouble.

4. Your tax preparer shouldn't be the one telling you how your business is doing.

It hits them hard. They couldn't be more shocked if you'd hit them upside the head with a dead fish. "I owe how much!", they gasp. "How can that be? I don't have any money!" Then the desperation sets in. The tax preparer is accused of not doing a good enough job. "You must have missed something." Or, they dig deep trying to think of anything, anything at all, that can lower their tax liability. "Did I mention that vacation, I mean, business trip I took to the Caribbean? That's deductible right?"

If the only time you know how your business is doing is on April 15th, you're doing yourself a huge disservice. If you're not tracking your tax liability and making plans to satisfy that liability, you're in for a very long, painful, tortuous lesson delivered at the hands of the Internal Revenue Service. You will pay. You will pay way more than if you'd planned ahead. And it will take you forever to get caught up.

5. Why getting your tax return prepared shouldn't be an errand you run on your lunch break.

Return to Page 1 Page 3

Caroline Jordan, MBA, is a veteran small business owner, accountant, consultant, trainer, and author. She is the owner of The Jordan Result, a company specializing in developing real world, practical resources to help small business owners improve cash flow and business operations. She is the author of Stop the Cash Flow Roller Coaster, I Want to Get Off! and Strength in Numbers. For more tips and articles to help your business succeed visit www.CashFlowRollerCoaster.com.