Small Business Owners, is $280 too much to pay the CPA to file?
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I know some talented people that don't make that much money, but they aren't accountants. Why would any sane tax professional spend his day dealing with trite tax matters for peanuts when he could make considerable more on more fulfilling work?
But hey, this is a difference in world view, if you want to think there are talented people on every corner making peanuts that's your business. I don't think that way, I view talent as something in very limited supply and I wouldn't even consider a tax professional that didn't graduate from a top program.
I am okay with this difference in world view, because in my corner of the world, I know I'm right. These people I have worked with ARE accountants, and if you choose not to believe that, oh well. There are many types of accountants, not just tax professionals/CPA's. If you don't want to believe that, it's your business. I'm done with the conversation.
Last edited by TheBeagleLady; 04-23-2012 at 09:10 AM..
How much are you guys paying? The guy I was talking to wanted $300 per month and he doesn't even do payroll (I do it)... all he does is tell me how much I spent and how much I made in a month... maybe I am getting ripped off... he doesn't even do my taxes other than the K-1... he wanted more money for that...
Do it yourself? If you're into DYI, how about dental work or legal work too?
It is stupid that someone thinks that paying $280 is absorbent or that you should do the work yourself. TurboTax is fine if are an individual with W2 and perhaps a 1099 or two.
Being tax laws change every year, I am guessing most owners don't have the time to learn the changes. A CPA (or) a decent accountant will keep you from going to jail. If you are part of a publicly traded company does the "Sarbanes-Oxley Act" ring a bell? They are also are your advocate when you face an audit from the IRS.
Also an accountant will help you manage your tax liability. They will make sure that your records are in order and able to tell you if your business is turning a profit or loss. Also telling you where your cash is going, where efficiencies can be found.
Sure QuickBooks can help, it is only a tool and is only as good as the information you input. Using it doesn’t always give you information needed.
As much as people like to run accountants into the ground, they serve an extremely important role in a business. The same applies to an attorney. Instead of wondering if the cost is out of line, consider that the fee is deducible on your next years filing. It is a cheap CYA in the grand scheme of running a business.
Excellent post. If you are a corporation, yuo need a balance sheet. Try getting that straight out of Quickbooks. Quickbooks is merely a tool, not the end result. And, I did want to bold good accountant because I have seen the work of some real dogs....the plain old accountant can sometimes be the best. I have worked with some great CPA's and I have also seen the work of some that you wondered what tax law they were reading......
Terrible advice. A good accountant keeps you out of trouble, finds way to increase your profitability, and allows you to devote your time to the things that make you money.
As a business owner, you do not have the time or the knowledge to learn every single nuance of the tax code. What's more, you do not have time to absorb the torrent of changes that happen every year. Further, given that you should be devoting the large majority of your time to actually operating your business, paying someone else to file your returns and help with your overall tax planning is a no-brainer. In fact, simply hiring the guy to look at your books around December 1 and start the year-end planning will pay for itself many times over. Because I ran my books on an accrual basis and paid taxes on a cash basis, just having someone run through the conversions and birddog the problem areas is an enormous help. One year alone, my tax planning meant a tax savings of roughly $70,000-$80,000, savings that would have been very hard to achieve on my own given how busy my year-end always is. Compared to that, the $700 I paid was chump change.
Further, any small business owner faces the constant possibility of a tax audit. If you do your own taxes, that means that, when one has to face the boys at the IRS, it's just you across the desk from them with your pile of files and receipts--regardless of how painstakingly you keep records and how conscientiously you file. On the other hand having a relationship with a good CPA means that, should you actually be audited, the CPA walks in there with your return, is able to explain everything within the context of the tax code, and can negotiate on your behalf based on years of experience and relationships with the auditors. You don't even attend the meeting. The one time I run afoul of the Feds over some alleged problem with my return, my CPA made two phone calls, sent a letter, and cleared the matter up within days. Instead of sucking up 2-3 hours of my time at $150/hour, not to mention additional mental energy, my accountant's bill was less than $100. To a smart business owner, this represents an enlightened choice.
If you own a business of any substance, there are two areas where you do not skimp: Lawyers and Accountants. Because not only will both save your bacon if you get into a dicey situation, but both have the potential to save you very large sums of money.
Another good post and bears reposting.
Quote:
The one time I run afoul of the Feds over some alleged problem with my return, my CPA made two phone calls, sent a letter, and cleared the matter up within days. Instead of sucking up 2-3 hours of my time at $150/hour, not to mention additional mental energy, my accountant's bill was less than $100. To a smart business owner, this represents an enlightened choice...snipped...
I can't tell you how many times a day this happens. It is either the IRS, the Dept of Revenue, the Dept of Labor, the State, I can't begin to name the different agencies that constantly send out inquiries or reports to be completed. the client drops them off or faxes them and we take care of it.
A very small busines, maybe a Sch C, can do it themselves but they are usually the ones that get audited the most because a good part of the time, they don't know what they are doing. In over 20 years, we have only had one full blown federal tax audit and that was mainly due to the previous accountant.
Back to the OP, $280 isn't bad at all. I hope you got your monies worth.
the poster scoffing about the need to know tax law only as it relates to you is really funny. Do you realize even until a few years ago, they were still issuing rulings on unresolved matters in the Tax Reform Act of 1993 ? We read new rulings, regulations, court decisions, every week. Then we go to tax school for 3 days every year to keep up and it is required. I agree it is good to have some knowledge of how business works but, to not utilize a good accountant is folly in my estimation.
Close to $1,100. I own an LLC, while my wife and I have commercial property investments and a boatload of deductions.
$280 is squat to pay. What's more, if you own your business, you need to think of it less as a service and more as having an advocate in case the IRS ever comes calling. The one time in twenty years I received a letter from the IRS questioning one of my filings, I simply called Tommy who did all the talking for me.
Bumping this decade old thread. I just paid my CPA $500 to prepare my return. Own an LLC, the rest is pretty simple. Last year he charged me $325 for the same type of return. When I questioned the large price increase, they just said their rate had changed. Wow! However, from what I'm seeing on this old thread, it's probably reasonable.
I'm unable to do my own taxes (dyscalculia) and need the professional representation in case something is questioned by the state or Fed.
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I would consider $280 a bargain for a small business owner tax return. There is a lot more work related to the Schedule C, so many expenses/receipts to go over in detail, vehicle mileage. When I had my business for 16 years at the end it was about $900.
I read every page of this thread, it turned into quite the exchange. The $500 I pay my accountant to properly prepare my taxes is invaluable. A drop in the bucket. As a solopreneur, I can only do so much and anything beyond basic bookkeeping gets delegated to a professional who knows what they're doing. My business is running my business and serving clients, not fussing around with tax forms and keeping up to date with the tax code.
The top four professionals every business owner should have a relationship with from day one:
1. Accountant
2. Banker
3. Insurance agent
4. Attorney
I would consider $280 a bargain for a small business owner tax return. There is a lot more work related to the Schedule C, so many expenses/receipts to go over in detail, vehicle mileage. When I had my business for 16 years at the end it was about $900.
Well considering its been 10 years, you'll never find a $280 preparer now unless its a family member. Most are over $1,000 for anything but very simple businesses like single-member LLCs doing consulting work.
Fact of the matter is software is pretty good today and costs around $100-150 for small businesses. Its not super hard to use but one should consider their time and effort, plus for some its insightful to DIY. You get an honest look at your business and where you are spending money, plus how you could do things to save some money if you consider tax impacts.
If you don't enjoy it and you'd rather get those hours you spend back, then pay someone to do it. Even if its say $1,000 more to pay someone, it probably will take you at least a day's worth of work to do it so consider is around $100-150/hour worth it? Few personal services cost less than that these days so take advantage of it. And if your preparer spends time with you and figures out ways to save you money, the effective cost is even less.
I would consider $280 a bargain for a small business owner tax return. There is a lot more work related to the Schedule C, so many expenses/receipts to go over in detail, vehicle mileage. When I had my business for 16 years at the end it was about $900.
I wouldn't, not anymore. It's so cheap I'd run away from it as you do get what you pay for.
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