The holidays and New Year’s Day are now behind us, which means the next thing looming on the calendar is tax season. For small business owners, it can also mean a tricky choice: hire an accountant or do the taxes yourself with business tax software like TurboTax Home & Business?
If you’ve ever used TurboTax for your personal taxes, you probably noticed that it’s affordable and easy to use, guiding you through each step. But filing taxes as a business owner, even if you only have five to 10 employees, is much more complex. Below we break down a few things to consider for each option.
TurboTax Home & Business:
According to TurboTax, you’ll want to use its Home & Business product if you are a small business owner or sole proprietor. Including additional state fees, it will cost you $112.
One great feature of TurboTax is that if you use it year after year, it remembers how you’ve filed in the past and gives you helpful tips and reminders along the way. Its questions are easy to understand, and each has its own “help” section.
If you have questions during filing that you need extra help with, TurboTax offers a Community feature, which lets you enter a question that’s then answered by other TurboTax users. You also have the option of paying for help from a tax professional: $29.95 for the first 20 minutes and $19.95 for each additional 20 minutes.
Some users feel they have to tread very cautiously when it comes to deductions while using TurboTax, because its descriptions aren’t always very detailed. For $40, TurboTax does offer Audit Defense, which means an accountant or an account representative will deal with the IRS for you in the event of an audit.
Accountants’ fees range, but expect to pay quite a bit more for their time – many charge about $200 per hour.
However, you also get personalized support from a CPA. A CPA can sit down with all of your information and present you with the best options for tax positions such as depreciation, any rental properties, inventory, or pass-through entities. A CPA can also keep you up to date with any tax position changes that could affect you, and provide planning for future tax events.
If you’re already working with a CPA to get guidance on internal accounting, he or she will likely know your business well and be able to offer sound advice, guide you through business tax credits, and get you the best refunds.
Choosing the right CPA is also an essential part of the process. If the person you’re working with is hard to communicate with and regularly makes errors, you’re not getting the most out of the money you’re spending. If you do choose to go with a CPA, it’s best to do your research.