As a home business owner, you likely have a thorough understanding of the importance of saving money wherever possible. But you also know that there are certain areas where it’s unwise to scrimp. Trying to determine whether or not it is in your best interests to hire an accountant to take care of your books is something all home business owners eventually have to face. Following are some things to consider when making this important decision.
1. Your Income Level
The IRS has certain characteristics it looks for when determining who to audit. They base this on a complicated algorithm that calculates numerous factors, including their chances for catching tax return errors that will lead to increased tax revenue for them. If your income meets or exceeds $200,000 a year, your chances for an audit are increased. If an accountant prepares and signs your return, those chances are reduced, partly because the IRS knows that the accountant has reviewed your paperwork and has signed off on it as being truthful.
2. Your Time Management
Home business owners are often wearing all the hats in the business. You can’t expect your business to grow and reach its potential if you are spending much of your time balancing books, filing quarterly tax returns, paying monthly payroll tax, and keeping track of deductible time and business expenses. An outsourced bookkeeper can take care of many of these tasks for you, but they will be the first to tell you that they are not accountants.