We’re in an era in which more small businesses are launching like wildfire. Many people find starting a small business of their own as easy as a piece of cake. However, most of the time, what they fail to prioritize are some of the major players involved in smoothly operating their small business. A tax attorney is one core character that people often overlook.
Business taxation can be complicated- even if your business is just a small startup and has little to no room for error. That is where the tax attorney comes into play. A small business attorney would work with you every step of the way and help you understand all the legal requirements as they come along.
Here are a few major reasons why you should get a tax attorney for your small business right away.
Roughly 4 out of every 1,000 tax returns get audited. While this number isn’t significantly high, there’s always a possibility that your return can be put under a magnifying glass.
If you get audited, you’ll need the assistance of a tax attorney. An attorney can provide protection during an audit so that you avoid penalties. They’ll help make corrections if necessary and speak on your behalf during the audit.
You’ll need the help of a lawyer to minimize damage post-audit so that it doesn’t hamper your business.
Every small business requires some sort of tax security, which only a tax attorney can provide through their vast knowledge of the area. They are your best shot at having qualified legal representation to help guide you from the initial set-up of your business to its transformation as it grows. Having a tax attorney by your side at all times will ensure your business framework is in compliance as well as vouch for you on your behalf, given you get into a legal issue. They will also help determine what taxes the business owes and assist in the general tax planning following the mandatory IRS guidelines. They will provide their expertise in the ever-changing world of taxes as you schedule your tax reports and payments accordingly. Undoubtedly, there is no replacing a qualified tax attorney who understands the legal and tax structure as well as the nature of your business.
Business tax returns are often complex, multi-faceted, and involve a lot of factors. A tax lawyer can help you through the entire year so that you’re not scrambling to file your business taxes when the deadline approaches.
They can help you organize your business taxes monthly and quarterly while keeping excellent records. Sound advice lets you run your business while knowing that your tax obligations are handled correctly.
Many small business owners neglect the fact that they are working in an environment where they will be paying taxes to the state and hiring employees, among other things. A tax attorney will guide you on how to go about your business while complying with your state tax requirements, even if you are operating outside your home state. Similarly, even if you don’t have any employees working for you, you must pay taxes as per the employer and employee’s legal understandings. Such matters are complicated, and consulting a tax attorney is the wisest decision to ensure the needs of your business are properly handled.
Tax attorneys are also knowledgeable about business as a whole. Having a business-related attorney by your side will help you navigate challenges as your company expands and evolves.
Tax help aside, these lawyers also understand business as a whole. They understand the differences and nuances between sole proprietorships, partnerships, S-Corporations, and other types of companies. Tax lawyers work with businesses in various industries. These reference points can offer valuable guidance that can make you a more informed business owner.
Since 20% of new businesses fail within the first couple of years, and 45% in the first 5 years, it pays to get every edge that you can.
A flower shop is different from a bakery, which is different from a jewelry shop, and so on. The point here is that every business is different and has its respective legal requirements and needs to meet. There is no such thing as a one-shoe-fits-all when it comes to the legalities of small business operations. That’s why you need a tax attorney to differentiate your business from all the other various pools of small businesses and address your specific business concerns separately. They will ensure that your forms, documents, and financials are kept in check.
Companies should also handle their estimated taxes diligently. These taxes are paid quarterly in January, May, June, and September. They’re due around the 15th of each month, depending on how the day of the week falls.
Paying estimated taxes is a vital piece of the puzzle for your company. You can be penalized for missing these deadlines or underpaying your estimated taxes. A tax lawyer will keep you on track with these payments.
They’ll also help manage your designations and bookkeeping throughout the year so that much of your tax return filing is a formality once the deadline arrives.
Would you rather look after your business and its regular operations, or would you compromise a day or two for running tax errands? The choice is obvious; no business owner would invest time and money in a small business, just to keep wasting most of that time understanding the finer points of its legalities. Therefore, the best foot forward that would help you save your time and not compromise on your business operations is to get a tax attorney. They will make sure all your legal tax obligations are met as per the requirements of the IRS while you focus on your business.
Business tax attorneys are vital because there are several different types of taxes that companies are responsible for. You don’t want to get behind with any of them because they will pile up and become more costly.
Examples of taxes that companies are responsible for include:
As you can see, these taxes vary, and some may or may not apply to your business. Understanding things like sales tax in your state and how it is collected can make or break your company. Lawyers will help you know the correct and current rate. They’ll also help you put systems in place so that you’re not negligent about your handling of any of these taxes.
Things like liens and garnishments can damage your business if not handled correctly. A tax lien is a hold placed on an asset in order to address a debt. If you owe back taxes, the Internal Revenue Service (IRS) can issue a lien. This can hamper your earning potential and hamstring your business.
Tax attorneys can dispute the lien or come up with a settlement or other resolution. Liens are particularly hurtful if they’re placed on your business real estate or other property.
Garnishments can also drain your business bank account. This is a type of lien that allows the IRS to collect what you owe out of your liquid funds. Addressing your debt with some sort of resolution will prevent a levy, which happens when the government seizes property. Working with a lawyer teaches you the difference between a garnishment and a levy and will understand how these circumstances can affect you.
Keep in mind that tax laws change from time to time and require you to stay up-to-date. This could come with significant changes, such as the tax rate in your industry or your tax bracket going up. It might also involve new write-offs or changes in your tax responsibility.
The best lawyers remain current with these tax law changes so that you’re prepared for your filing. This includes tax law changes on the state and federal level along with those that are specific to your industry.
Having another set of eyes on all of your tax documents can be incredibly helpful to your business. This will minimize errors and make sure that all sections are completed correctly and in full.
Making mistakes on your tax filings can get them sent back, costing you more valuable time and money. The IRS has been backed up for the past few years and the events of 2020 exacerbated it. So if you have mistakes on your tax documents, you can expect significant delays that can put your company further behind the eight ball. Tax attorneys not only have a skillful eye that they can look over your documents with, but they also have software platforms they can use to run a scan for any and all mistakes. These checks and balances work in your favor and will help you be diligent about the way that your business is handled.
Some companies balk at hiring a tax attorney because they don’t want to pay the money. The fact of the matter is that you’ll save more money as a whole by hiring an attorney. Their ability to cut out your mistakes, find deductions, protect you against audits, and overall handle your taxes correctly saves money in the long run.
You’re more likely to commit costly errors when you do your taxes yourself. Unless you’re an expert, you’re going to be playing catch up and will have a learning curve. This alone makes your taxes take more time, which costs you money since you’re taking your focus away from your primary areas of business. It’s best to make the investment in a lawyer upfront and know that your taxes are handled correctly.
It’s integral that you hire a lawyer if you owe any back taxes. A tax attorney can help you satisfy the balance or find a settlement for much less.
There are many options in play when you owe back taxes. You may choose to enter an installment agreement to pay it down little by little. You may also be eligible for an offer in compromise (OIC) which can help you settle the account for a fraction of what you originally owed. An attorney can not only be an advocate for you, but they can also provide counseling resources so that you know what you are facing and which options are best. You may seek currently not collectible (CNC) status to help you catch up on your taxes as well.
It’s best to tackle your back taxes aggressively, rather than allowing them to add up. This is the kind of issue that can hamper your business if you’re not diligent about it. Reach out to attorneys that are skilled at these arrangements so that you can get the best possible outcome.
As the old saying goes, there are two certainties in life: death and taxes. There is no running away from taxes. Suppose you feel you can argue your lack of knowledge about taxes, making you eligible for a tax-free run at the business in front of the IRS. In that case, you will be the first to do so- because naturally, no one can question the legal authorities and the system they have in place. The most you can do is to have the services of a tax attorney at your disposal while your business runs, to guarantee its well-ordered upkeep and tax security.
You will also need the assistance of a lawyer if you have any previous years tax returns that have gone unfiled. In many cases, you can’t file these taxes with software anymore and must file paper returns because it has been too long. A lawyer can process your unfiled tax returns for you and get them on the record to make sure that you are up-to-date in your filings.
This is an essential piece of the puzzle before you can enter into an offer in compromise or reach a settlement agreement.
In most cases, there are reasons that your previous year’s taxes have gone unfiled. Tax relief attorneys can do it in an organized and expert way to prevent mistakes and get you back on track. They can also help you with any problems that led to you not filing previous year’s returns.
It’s also helpful to hire a lawyer because any conversations or information shared are confidential. This is the benefit of attorney-client privilege and will prevent you from incriminating yourself.
Tax problems can come with significant penalties that a lawyer can protect you from. You will appreciate being able to speak openly with them and have them look through your books without the worry of opening yourself up to bigger issues.
Tax lawyers are useful for far more than just filings and audits. They understand how different business designations have different tax obligations. Their expertise is essential if you’re starting a new business. In fact, tax classification is often one of the biggest variables that business owners consider when opening a new company.
Having this insight from the very beginning through the help of an attorney will make sure that you choose the most ideal business designation. They can help you with your company’s initial filing and answer any questions that you have along the way. Having this advice upfront will help you prevent errors that will set your company back before it even gets started.
Finally, tax attorneys are helpful because they can help you lower your tax bill. They will comb through your taxes and make sure that you are taking every possible deduction. There may be many deductions you weren’t aware you were eligible for. Having an expert by your side keeps you up to date with new and temporary deductions that change from time to time.
Growing your income and reducing your tax burden is an essential part of business. When you have a tax attorney by your side, you’ll stay on top of this every step of the way. It can help you grow your profit margins and make sure that your company thrives for the foreseeable future.
Federal and state tax laws are in a constant state of motion. Rules and attributes are always shifting, and it is difficult for a simple small business owner to match the legal requirements of a new tax code every year. Therefore, if you are a small business owner, get yourself a reliable and experienced tax attorney from our team at Polston Tax Resolution and Accounting.
Our team offers everything you need to make sure your business is maximizing deductions, meeting deadlines on time, and doing everything necessary to keep you out of tax trouble while paying as little in taxes as possible. Contact us today for further details.
