We live in a DIY age, where people imagine to themselves that with a quick click on Google they can suddenly turn into an expert on pretty much anything, I mean when I google my sickness symptoms it keeps telling me I have Lupus, so it’s easy to be convinced in believing you’re suddenly an expert on tax preparation.
And a lot of small business owners, especially beginners, wonder if eliminating “unnecessary” costs, such as having a professional tax specialist helping them make the right financial decisions, might be the smart thing to do.
At Watson & Watt, chartered accountants and tax specialist professionals in Brisbane, we know the concerns for thrift and prudence that drive, or should be driving, most small business owners. After all, we’re a small business too. But we also know what happens to businesses that operate on a penny-wise pound-foolish notion of thrift.
Here are five reasons (there are many more than five but you’re a busy person) why you need a tax specialist for your small business.
And they write them as broad as possible to catch as much tax revenue as possible. This means the law is not always prescriptive, there is substantial amounts of ambiguity and grey areas. As lots of the pollies are lawyers, the cynic in us might think they do this on purpose to justify the existence of the legal profession with all the court cases that evolve from tax disputes. Plenty of lawyers depend on tax specialists to help them figure out whatever it was the politicians intended to mean too.
Tax laws are plentiful, it’s not just one Act, but several, in fact just the income tax law encompasses two acts in its own right, then there is GST and Fringe Benefits Tax (FBT) and superannuation laws! Trust me when I say they are unforgivingly tough to navigate and missing or misunderstanding something seemingly small and unimportant can do the worst thing in the world for your small business: it can cost you money. And that can cost you your business.
OK, so what does that mean exactly? It means that within the tax laws there are intentional mechanisms (call them “tax breaks” if you want), and a lot of unintended opportunities (call them “loopholes” if you want), that can save you and your small business a lot of money. But that is only true if you know where to find them and how to profitably and legally use them.
The truth is you are working hard every day to be the best at your business, using your skills and your knowledge base. And that knowledge base isn’t tax is it? So, to maximize your chances of getting every cent of tax savings that is available to you, and to make sure you aren’t spending your valuable time trying to become a tax expert, doesn’t it just make sense to consult an already trained and available expert at that sort of thing?
And they call those folks tax specialists
Obviously, if you’re paying too much tax that means your take home profit is too little. However, this idea isn’t just the flip-side of your being extra generous to the government. It is also a consideration and a discussion, such as you can have with a professional tax specialist, especially one who is also a small business expert, about what your goals in your small business are and how and when you plan to meet those goals.
After all, just because you save a lot of money in taxes in no guarantee that saved money is going to automatically translate into more profit for your business. It depends on how you use that money.
Will you reinvest it in the business, and how should you do that? For example, are there tax advantages to certain kinds of business reinvestment versus others? And when exactly during the tax year should you execute those plans?
Or do you pay yourself and other investors dividends? And how is that going to impact your business and you from a tax standpoint?
Let’s face it, a “small” business has fewer resources than a large one to cope with making a critical mistake, especially on finances and taxes, two fundamental concerns of business operations.
It isn’t saving you and your small business money doing your own taxes and being your sole financial counsel if you simply do not have time to personally obtain the expertise that might have allowed you to spot and avoid making a critical error. An error that could be costing you many thousands of dollars!
As we said, tax laws are complicated and they are constantly changing. To truly understand the financial consequences of those changes and how they impact your business, you need expert guidance.
Not just once a year, but all year.
Because when you really think about it, and yes a lot of people avoid doing this because it is depressing, but “tax time” is all year long.
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A professional tax specialist can help you plan how your approach to taxes can be refined to not only save your small business needless expenses, but they will help you see how the ongoing process of tax preparation can lead to more profits (monthly and yearly), more growth in your business, and to you and your small business achieving your goals much sooner rather than never at all.
When is the best time to consult a tax specialist? The best time is before you first open the doors to start doing business. In fact, expert tax and financial guidance in the planning stage of a business can help you avoid many basic business problems. And that is likely to be a lot less costly all around than needing to solve those problems after they have needlessly occurred.
On the other hand, if you did not seek out advice before getting you and your small business into tax trouble, you probably well understand it is past time to consult a tax professional.
So, don’t delay.
Not All Tax Specialists Are the Same
These are five good reasons to consult a tax specialist. As we said there are many more.
Now, having said that, it is certainly true that not all tax specialists are equally motivated to help you succeed. Some just fill in forms and figure you should be happy they are saving you the time to do that. But save you money? That would be extra work.
At Watson & Watt, we know and value exactly what you and your small business are up against. And we do the extra work to help make sure your small business is as profitable as it can be. Still not convinced? Check out our accounting and tax services, and see if we’re right for you.