Protecting Your Business With Professional Accountant Services

Posted on September 22, 2015


Take These Six Necessary Steps With Professional Accountant Services

Everyone wants to avoid the attention of the IRS, but did you know that there are mprofessional accountant servicesany things you can do to lessen the risk of an audit? Often, professional account services can help you avoid some of the pitfalls of financial management. Here are a few key areas to keep in mind as you talk with your professional accountant services and make plans for your tax return.

  1. Report information as it is reported to you. Be sure that information from 1099s and other documents is reported accurately. Your vendors will be recording that same information as income, and the IRS matches it up in their system. An accountant can help you treat these documents appropriately, such as in a situation in which a client paid income to you in January but they recorded it as paid in December.
  1. File the necessary forms, but nothing more. There are situations where filing an additional form could invite scrutiny. For instance, you may file a Form 5213 to establish your new business and prevent it from being categorized as a hobby and being audited for the first five years. However, at the end of five years, the IRS may review your returns to determine whether you have been profitable in three out of five years. It’s often better to err on the side of not filing a form if it is unnecessary. This is an instance where professional accountant services provide critical guidance.
  1. Watch your deductions. When you deduct your meal and entertainment costs, for instance, be careful to only claim 50 percent. Your startup costs also have a limit of $5,000 before you must amortize and cannot be written off your first year.
  1. Invest your time in accurate bookkeeping (to save time later). It’s tempting to push bookkeeping to the back burner when you are starting your business. A shoebox for receipts might be a short-term relief, but it could cost you a lot of aggravation when tax time comes. Instead, prioritize bookkeeping and make careful notes of your expenses so that you can take full advantage of these deductions on your tax return.
  1. Report income accurately. If you over report income, such as including the sales tax you’ve collected, you will end up overpaying on your tax return, too. Make sure that you deduct the sales tax before you report your income.
  1. Starting your business in your house? Take the deduction. If your home is where you are running your business, take a deduction for the amount of space and utilities you use to run your company. While this used to be a red flag for an audit, the home office has become so common that this fear is likely unfounded.

At AccuBiz, we regularly work with small businesses that are just getting started (as well as established businesses). If you are interested in securing professional accountant services, Bert Doerhoff, CPA has the experience and expertise to protect your business from the unnecessary attention of the IRS. Call us today to set up an appointment.