Remote Tax Preparation Services For Small Businesses & Startups

Tax Accounting For Small Business FAQs

How much does tax prep cost for a small business?

Small business tax preparation costs will vary quite a bit depending on the complexity of your tax filing needs and the type of business. On average, small business tax services will charge between $450-2,500+. Sole proprietors will usually be on the lower end of that range, while S corporations and C corporations will be on the higher end. Whether you use bookkeeping services, a home tax expertise firm, or work with a local tax pro, proper handling of business tax docs and your personal and business taxes, including a thorough tax savings analysis based on a profit and loss statement, can maximize deductions and potentially increase your tax refund while keeping your tax bill manageable.

When you reach out to us about tax filing services at Milestone, we’ll take time to learn about your business and can provide a more accurate estimate based on your needs. We focus on a flat-fee structure and transparent pricing, so you don’t have any surprises after filing.

Is a CPA worth it for a small business?

It’s common for small businesses looking for tax services to debate between working with a CPA vs. a tax preparer. Certified public accountants (CPAs) offer high levels of expertise that can be worth it when you have intricate tax filing needs, such as business management, estate planning, or international tax filing issues to handle.

However, small businesses with straightforward tax filing needs will often find working with a general tax preparer lends enough expertise. A tax preparer will still have enough knowledge to accurately file tax returns and offer advice on deductions and credits related to typical small business situations, while costing you less than a CPA.

What business expenses are tax-deductible for small businesses?

Some examples of common small-business tax deductions include advertising and marketing, rent and utilities, office supplies and equipment, business software, business-related legal and professional fees, employee salaries and benefits, contract labor, business travel, home office expenses, and business insurance.

Not all of these will be tax-deductible in every circumstance, and there are many more potential deductions that small businesses could claim depending on the situation. Working with a professional tax preparer will help you accurately determine which deductions your business qualifies for and file accurately.

Do I need to make quarterly tax payments for my small business?

Most small business owners will need to make quarterly tax payments if they expect to earn $1,000+ per year. That includes independent contractors, freelancers, sole proprietors, members of partnerships, and those who run S-Corps or C-Corps.

Quarterly payments are based on your estimated yearly income. Not making quarterly payments can result in extra fees when you file annual taxes.

We know planning for quarterly payments can feel challenging for many small business owners, which is why we offer year-round services at Milestone that can help you estimate payments and manage them effectively.

What forms do I need to file based on my business structure?

It’s common for small business owners to feel unsure about business tax filing requirements for their business structure. The typical forms each type of business will file for annual taxes are:

• Sole proprietors: Use Form 1040.
• Partnerships: Use Form 1065.
• C corporations: Use Form 1120.
• S corporations: Use Form 1120-S.

The exact forms needed throughout the process of managing small business taxes can differ depending on specific situations. The IRS provides a list of resources for different business structures that can help.

We also offer support for small businesses year-round at Milestone to ensure you’re using the correct forms and reporting methods while filing annual returns or making quarterly payments.

When should I hire a tax professional instead of using tax software?

You should work with a tax professional instead of using tax software when you have complex filing requirements, want to reduce stress, or prefer having extra support throughout the process. Some benefits of working with a tax professional include:

• Well-rounded expertise to help with industry-specific deductions
• Help manage complex tax or reporting situations
• Personalized advice and strategy based on your needs
• Peace of mind since your taxes have had a human review before filing
• Support available in case of audits or errors
• Time savings since a preparer can handle a lot of work for you

What is the Difference Between a Tax Accountant and a Regular Accountant?

A regular accountant typically manages a broader scope of financial activities, including bookkeeping, financial reporting, and analyzing financial data to assist in the strategic decision-making process. Their expertise is focused on ensuring accurate financial records and helping businesses understand their financial performance. Regular accountants work across various domains such as budgeting, cost analysis, and production of financial statements.

In contrast, a tax accountant has a narrower focus, specializing in tax preparation and compliance. Their primary responsibility is to prepare tax returns and ensure that clients comply with current tax laws and regulations. They provide expert advice on tax planning strategies to minimize tax liabilities and facilitate accurate tax filing. Tax accountants are deeply familiar with tax codes and continually update their knowledge with the ever-changing tax legislation.

The training and certifications required for tax accountants and regular accountants further highlight their differences. Tax accountants may hold certifications like Enrolled Agent (EA) or may be Certified Public Accountants (CPAs) with specialized training in tax. These certifications are a testament to their proficient understanding of tax laws and their ability to represent clients before the IRS.

Conversely, regular accountants might pursue certifications such as CPA, Chartered Accountant (CA), or Certified Management Accountant (CMA), which cover a broader range of accounting principles and practices not specifically focused on taxes.

How can year-round tax support help my small business save money?

Ways that year-round tax support can help small businesses save money include:

• It offers strategic tax planning so you can proactively manage yearly tax obligations.
• It can help with accurate year-round expense tracking to ensure you receive all deductions you’re eligible for.
• It helps you file quarterly payments and annual tax returns in a timely and accurate manner to reduce the chances of penalties or audits.
• You’ll receive support in choosing the ideal business structure to optimize your tax situation.
• It can help with cash flow management to ensure you’re setting aside enough money to pay for taxes.

When you need a year-round service that provides well-rounded support, our team at Milestone is here to help. We offer virtual tax preparation and management services to help small to mid-size businesses handle tax needs efficiently and effectively.

You can get in touch with our team at Milestone today to learn more about how we can help.

How To Choose The Right Tax Service Provider for Your Business?

Choosing the right accounting service provider is critical for the success of small businesses. Start by clearly outlining your business’s needs and the specific services you require, such as bookkeeping, tax preparation, or full-service accounting. Research potential providers by examining their specialties, client reviews, and industry reputation. Another vital factor is the provider’s understanding of your industry, as industry-specific insights can significantly enhance tax strategy and financial management. It’s also advisable to consider the provider’s flexibility and willingness to tailor services to your evolving business needs.

What Is The Difference Between A Tax Preparer And A CPA?

Tax preparers generally focus on preparing and filing tax returns. They provide assistance with filling out tax forms and advice on deductions and credits specific to your situation. They might not be required to have formal accounting education but often have relevant training or certifications.

Conversely, CPAs, or Certified Public Accountants, are licensed professionals possessing a comprehensive understanding of accounting principles, tax laws, and financial reporting. To become a CPA, one must meet rigorous education and experience requirements and pass the Uniform CPA Examination. This level of expertise makes them highly valuable for more complex financial situations.