Why pay a CPA to do your taxes when you can file electronically for next-to-nothing? OK, so it takes a couple hours, and you always wonder if you could be claiming more deductions, but filing online is so convenient.
At least, it used to be. When you only had a Form W-2 to worry about, filing online was a no-brainer, even if it was a headache. But now that you are self-employed, you feel a migraine coming on every time you think about your taxes: Schedule C's, Form 1040's and 1099's, estimated payments, itemized deductions…
A CPA can save you time and money… and that's not all.
How are you ever going to get it all straight? Here are three reasons why working with an account is smart business:
1. The “Do-It-Yourself” Fallacy
Entrepreneurs can do anything, or so we like to believe. Self-employment is a kind of self-reliance, and when you work alone, you are responsible for everything: recruiting clients, writing contracts, closing deals – the whole nine yards. When something breaks you fix it. You solve problems, plain and simple. Why shouldn't you file your own taxes?
Because a CPA can save you time and money. Because you need to protect your business from fees, fines, and audits. Because your taxes are not just another problem to be solved.
Think of it this way: when your car breaks down, you take it to an auto shop, and when your roof is leaking, you call a contractor. Sure, you can put your car on blocks, pop the hood, and take apart your engine piece by piece, just as you can fumble through your own Form 1040 SE's, but why would you? A pro can do a better job in one-tenth of the time. They are also likely to use accountancy software like Knuula to make their business much more efficient.
2. Finding Deductions and Credits – Avoiding Audits
An accountant knows the tax code inside and out, far more than some software program. They can help you find deductions for your business in order to maximize your savings. Additionally, they are trained to seek out and eliminate red flags that could prompt an audit.
In the unlikely event that you are audited, your tax preparer can guide you through the audit process, either by helping you prepare for an in-home audit, or by working directly with the IRS on your behalf. Although only about 1% of U.S. taxpayers are audited annually, self-employed individuals and small business owners are audited much more frequently than wage earners. Trust me, you do not want to face the IRS alone.
3. Working With an Accountant Gives You Piece of Mind
Savings, security, convenience – in the end, it all adds up to piece of mind. I can guarantee that you'll sleep sounder with a certified professional on your side. So put away the shoe box of receipts, take a couple aspirin, and call a CPA. You will thank me in the morning.