Doing your taxes as a new business owner can feel confusing. There are a lot of rules for big companies, but they don’t always make sense for small startups. The government wants startups to succeed, so tax breaks are available—things like deductions that lower what you owe or special rates. However, using the breaks means knowing complex rules, and founders are too busy growing the business to learn it all.
This is where tax consultants step in. Consultants have studied startup taxes and have seen what works before. Instead of trying to figure it out alone and risking mistakes, their experience helps startups file correctly and pay less taxes. The goal is to be legal and take advantage of every opportunity.
Here, we’ll share the best things to consider when choosing a tax consultant service that fits a new small business budget but still provides helpful guidance. Starting off right with the taxes will help your startup’s finances in the long term.
Consider Firms That Specialize in Startups
It’s crucial to pick a consultant who knows startups inside and out. They should understand what problems new business owners face every day. Regular tax places know big companies best. However, startups are different in terms of changing goals and tight budgets.
Look for a consultant who often works with startups just getting going. Ask how long they’ve helped new ventures. Also, find out if they have experience in your kind of business, such as tech, clothing, or food. Knowing a lot about startups lets the consultant help in better ways.
For example, a startup specialist recognizes that expenses, in the beginning, may not relate directly to sales yet. Or how owner salaries often vary while demand is tested.
Experts in this field are aware of deductions for these common startup issues. They can help get the biggest possible deductions, lowering the startup’s tax bill. Hiring someone with startup experience means the consultant can provide the best guidance specific to your needs.
Startups also benefit from a consultant familiar with the latest support from the government. Rules change now and then to encourage more new businesses. A proactive consultant keeps learning these, so startups don’t miss any opportunities. Their experience helps tap into programs and savings designed for small startups.
Click here to see the benefits of hiring a tax consultant for your business.
Ask About Fixed-Fee Packages
When money is tight, it helps to know exactly what tax help will cost. Hours spent prepping returns add up fast. Startups should ask firms about fixed-fee packages for the first year or two. These bundle the most frequent services new ventures need.
Fixed fees let owners budget affordably. Firms like REDW may have common bundles that include an initial consultation, filing the first set of business and personal returns, answering basic startup tax questions throughout the year, and other business tax services by REDW to enterprises. Prices are set, so there are no expensive hourly bills later.
Look for flexible plans, too. Extra charges may apply if your needs change from what they were usual. But fixed sums avoid costly miscommunications overcharges. Firms know startups operate with strict financial limits at first. Packages help both the startup and consultant plan for costs in advance.
Don’t forget to inquire about additional services. Maybe you’ll need help with bookkeeping. Find out if that’s included or if there are separate reasonable fees.
With all details provided upfront, startups keep taxation work within budget estimates. And they gain ongoing support without monthly payment surprises biting into profits. Some experts even offer the first consultation free to new clients, making that initial tax help meager cost.
Ask How Consultants Stay Up to Date
Tax laws and programs for startups evolve all the time. New rules could mean missing out on savings if advisors aren’t trained on changes. Ask firms how they continuously advance their knowledge for clients’ benefit.
Respected consultants make an effort to keep studying. They may attend regular seminars, read industry publications, and do other research to complement their experience. Getting certified in startup or small business taxation shows commitment to expert skills.
See what associations a firm belongs to as well. Groups like trade organizations disseminate insider news and best practices. Staying plugged into such networks keeps consultants ahead of the curve.
You also want to work with folks who will be helping your business for years. So, it’s good if they keep refining their knowledge, not just clinging to past studies. Ask how long they’ve aided other startups through different growth phases, too. Click here to learn more about staying up to date with tax laws.
Request References from Past Client Startups
When choosing who to trust with your taxes, nothing convinces you like hearing from real startups who hired a consultant before. Ask firms directly for contact info of past startup clients similar to your business.
Give 1 or 2 client owners a call. Find out how long they used the firm’s services and through what stages of growth. Ask what value they felt their money got in return. Did the consultant help navigate complex issues and maximize returns?
Also, inquire if the clients ever had any problems and how the firm resolved them. Good companies own up to occasional errors and make them right. Their priority should be serving customers, not hiding imperfections.
Read https://www.linkedin.com/pulse/top-5-most-common-irs-tax-issues-how-resolve-them-lisa-corbitt-cpa-elyzf/ to learn more about common tax issues.
Think about whether past clients speak highly of tax guidance personalized for their needs, too. Take the step to ask for reference contacts – it protects your interests as a new startup owner against those pitches.
Final Word
With so much to consider when founding a new company, simplifying tax compliance should be one less concern. Most new business owners carefully choose affordable yet specialized consulting support to provide guidance crucial to surviving volatile early periods.
These consulting experts help handle taxation issues properly, enabling founders to concentrate their energy on product improvement, outreach, and other core tasks driving business growth. Taking time to find trusted advisors frees time and reduces risks, paving the smoothest path ahead. New ventures that launch smart with tax planning gain one valuable advantage in the challenge of building sustainable operations.
Good Read: 7 Stages of Business Growth
