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by jermaustin1 1639 days ago
> and maybe stop paying an accountant to do my taxes

My mother was an accountant for years, I learned a lot of accounting, but there is a MASSIVE difference between knowing how to basically bookkeep and the tax code.

I'm in the US - so might be easier in less tax-lobbied countries.

When I started my second consulting firm (after closing down my first when I took a "real job"), I initially tried to go at it myself, but payroll is a complex process, so I decided to outsource that. Cost me $20/mo, but saved me hours of work. Then when the end of my first tax year hit, I started trying to figure out how to do my corporate taxes myself. Downloaded all of the tax forms I could find that I needed, and printed the couple hundred pages of information. 4 weeks into filling out the forms and 2 weeks before a filing deadline, I gave up. To the best of my knowledge I had underpaid my quarterly estimates by $30k.

I reached out to a small business accountant (brother of a good friend), and for only $1200, he handled the 112 page tax return, found out I had only underpaid by less than $2000, also found a whole bunch of write offs I didn't even know to look for, and did a full reconciliation of my accounts for that.

It was at this point that I decided I will always pay for professionals to do the part of this job that I am not proficient at. All of my various accounts-related services add up to less than 1% of my revenue, and if it were even 5 or 10% of my revenue, I'd probably still pay it, just to know it was done correctly.

1 comments

Many members of my family run our own small businesses, and have given similar advice. Always either do your own bookkeeping (or heavily review and understand the work you have done) but then pay for the for not only the processing of tax by CPAs, but also their advice. There are plenty of ways to optimize a business to not just be more tax efficient, but also financially structure operations, especially with the way one approaches debt.