Business tax preparation: what to know

What the job involves, what changes the price, and what to ask a pro.

What business tax preparation is

A preparer completes tax returns for a business, reviewing books, income, expenses, payroll and deductions, and files returns suited to its structure. Owners hire one when the business has employees, several owners, inventory or income that makes the return complicated. This is general information, not tax advice.

Signs you need it

  • Your business has employees, contractors or several owners
  • Your books are not ready for the tax deadline
  • You changed structure or started a new business this year
  • You bought equipment, a vehicle or property for the business
  • You received a notice about payroll or business tax filings
  • You do not know which forms your business type must file

What the pro does

  • Review your business structure and the forms that apply to it
  • Review your books, profit and loss report and balance sheet
  • Check payroll, contractor payments and sales tax records for consistency
  • Prepare the business return and any owner schedules
  • Review the return with you before filing
  • File the return and provide copies, with a plan for next year's estimates

What changes the price

Every job is different, so we do not publish prices. These are the things that move the quote up or down.

  • Business structure and number of owners
  • Quality and completeness of the books
  • Number of employees and contractors
  • Number of states where the business operates
  • Whether there is inventory, equipment or real estate
  • Whether prior years are late or unfiled
  • Whether the preparer also helps with bookkeeping

What a written quote should spell out

  • The returns and schedules included
  • Whether owner returns are separate
  • Whether bookkeeping cleanup is included
  • Whether payroll and contractor reports are included
  • Deadlines for you to send documents

Questions to ask before you hire

  • What credentials do you hold and what is your experience with my business type?
  • Do you prepare owner returns too?
  • What do you need from my books?
  • How do you handle late or missing records?
  • Can you help with payroll and contractor reports?
  • Will you represent the business if it receives a notice?
  • How will we plan for estimated payments during the year?

Red flags

  • A preparer who will not sign the return
  • Promises of large deductions before reviewing the business
  • Advice to hide income or invent expenses
  • No written scope
  • Filing without your review

What you can do yourself

You can keep your books current, separate business and personal accounts, and save receipts and contracts. Call a professional when the business has payroll, several owners, inventory or late filings. Tax questions that depend on your specific facts belong with a CPA or enrolled agent.

Licenses and permits

Paid preparers generally must register with the tax authority, and CPAs, enrolled agents and attorneys hold further credentials. Ask for credentials and verify them with the tax authority, the state board or the state bar.

Business tax preparation questions

Do I need a separate return for the business?

It depends on your structure. A qualified preparer can explain.

Can my bookkeeper prepare my business taxes?

Only if qualified to prepare returns. Ask about credentials.

When should I start?

Start before the filing deadline so your books are ready.

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