Today I’m excited share a fabulous guest post written by my brother, Jeff Tubaugh, CPA from Columbus, Ohio. I hope his wise words help you this tax season.
I heard that I can deduct that on my taxes…
It’s that time of year again…time to file your tax returns. While some take the attitude of “the more taxes I am paying, then the more money I am making,” many people dread this time of year, because they do not want to know how much they owe in taxes.
One of the best investments you can make this time of year is paying a professional CPA (certified public accountant) to prepare your tax returns. Many people prepare their returns themselves. But many of us CPAs review returns of potential clients who file their own. We often find deductions that are missed, rules that are misapplied, and a complete lack of understanding of the opportunities that exist. Software alone cannot always help you take advantage of deductions.
If you Google “overpaid taxes,” you will discover article after article with studies showing that Americans consistently overpay taxes on an annual basis. Hiring a CPA does cost money, but there is a good chance that they can save you more in taxes than what you pay them in fees.
There are countless issues and questions that small businesses face that a good CPA can assist with:
- Are there deductions that I am missing?
- What other types of taxes do I owe besides the income taxes that I file each year? (i.e. Sales Tax, Use Tax, Gross Receipts taxes in some states, Personal Property taxes in some states)
- Are there any new rules that I need to be aware of? (There are almost always new rules that impact your business every year.)
- What types of retirement plan savings options do I have?
- Is my business structure correct for my situation? i.e. should I be an LLC? Should my spouse and I both own the entity? Should I incorporate?
- If I live in a state with city taxes (like Ohio), how do I navigate the fact that I travel to various cities to conduct my business? Do I have to file and pay taxes in all those cities?
Do not underestimate the complexities of the Internal Revenue Code. While there is always talk of Congress “simplifying the tax code” in the future, we don’t know if and when that will ever happen. A CPA can help you navigate those complexities and make the process less stressful for you.