A 2013 study conducted by Sage revealed over two-thirds of small businesses outsourced accounting tasks. The number one reason for this decision was — you guessed it — the complexity of the federal tax code. Most business owners will agree that ensuring proper compliance in tax reporting is no cakewalk.
Many have pondered why the U.S. federal tax code continues to require close to 80,000 sheets of paper just to transmit taxation rules and regulations to U.S. businesses. It’s no wonder businesses are concerned about tax compliance, and it’s certainly not simple to comply with such a mammoth, unwieldy set of laws.
Is it any wonder why small-business owners fear to tread into such a complex task? The fact is the time you will spend perusing instructions and interpreting various regulations and tax scenarios for your particular business is time you could spend growing your enterprise.
Look at it this way: As a small-business owner you are a precious resource limited to just 24 hours in a day. Even if you have a vice president or secretary who oversees business management, those people will spend valuable time taking in all the annual changes that the U.S. Congress kindly sends our way each year. Do this exercise and you’ll get a picture of the true cost to your business. Calculate your hourly worth to your company. That way you’ll have a realistic picture of what you’re actually losing in productive time when you download those IRS tax forms and their accompanying mammoth instructions and wade through that information yourself.
Even if you think you’ve actually surmised the correct calculation for taxes owed, what if you missed the mark? Unless the return is audited (and it may never be), you may have shortchanged your business by overpaying your taxes. It happens all the time.
Lastly, consider that an accountant can do much more for your business than simply calculating your tax liability. These trained professionals analyze business performance numbers that feed back a wealth of information on the underlying health of the business to principals of the business. In the end, contracting with an accountant is a very wise investment.