How to Prepare for a Small Business Tax Consultation

Many businesses pay more than they have to in taxes in their first year. The overpayment can be significant, with impacted businesses paying up to double what they should in taxes, which could be the difference between an annual profit and an annual loss.
Why does this happen so often? Because there’s usually more to doing taxes than filling out a few fields in a do-it-yourself tax platform. Businesses need more. They need tax professionals who can not only prepare tax returns and identify deductions but also advise them throughout the year and help navigate the ever-changing tax laws on both the state and federal levels.
Before business owners can enjoy the advantages of using a tax professional, they must first attend a tax consultation, which aids in understanding their unique tax situations. If you’re attending a tax consultation soon or about to make an appointment, use this guide for what you need to know before hiring a tax professional, which includes the questions to ask and other considerations to help maximize the experience.     

What to bring to a tax consultation

Bring as many of the listed materials to your tax consultation as possible. The business tax advisor you’re meeting with will likely be able to proceed with the consultation, even if certain materials still need to be included.

Tax prep information

  • Social Security number and Employer Identification Number (EIN). Both act as unique identifications for you and your business.  
  • Business address. The place where your business is headquartered.

    • Income records

  • W-2s and 1099s. These tax forms detail payments made to in-house employees and contractors. 
  • Financial statements. These materials detail your business and financial performance. 
  • Balance sheets. Balance sheets state your business’s liabilities, assets, and capital. 
  • End-of-year reports, including profit and loss statements. This documentation provides comprehensive information about the state of your business finances.

    • Tax deductions

  • Expense receipts. A record of business expenses made while operating your business.
  • Payroll records. A document detailing payments to employees. 
  • Home office information. Details about your home office that could impact your tax burden. 
  • Mileage log. The total amount you drove while performing duties associated with your business. 

    • Tax payments

  • Prior year tax returns. Prior year tax returns are materials that detail your business’s information from the previous tax year. 

    • Is doing small business taxes hard?

    The short answer? Yes and no! There’s a lot involved in maximizing a small business’s tax savings, and the chances an owner or traditional firm is up to the task aren’t good. Whether you’re just starting out or are established, modern small businesses require solutions calibrated to their unique needs, which is where the trusted small business tax advisors at 1-800Accountant can help.
    We make the process almost feel easy (almost), with excellent services buttressed by vital educational content covering year-end accounting checklists, essential tax tips for the fiscal year ahead, and how to prepare and file your return no matter the business entity (sole proprietorship, single-member LLC, S corp, LLC, C corporation) you’re formed as. 

    How do small businesses prepare for tax season?

    There are numerous actions a small business owner can take to prepare for tax season. Chief among them is ensuring pertinent documentation and records are retained and organized to be handed off to your accountant easily. 
    Manually storing documents and records and keeping them organized can be tedious for busy small business owners, especially if the accounting firm you’re working with needs a solution to this problem.
    1-800Accountant clients can sidestep this issue by effortlessly uploading documentation to their client portal. Documents are stored safely and securely with bank-level 128-bit encryption. 

    How long does a tax appointment take?

    The duration of your tax appointment will vary depending on a few factors. Factors include:

  • The number of people you employ. 
  • The level of detail on your current balance sheets. 
  • The complexity of your business investments 

    • The duration of your appointment will depend, in part, on how organized your materials are. 1-800Accountant considers an owner’s busy schedule, which is why our consultations are targeted for 30 minutes or less.  

    How much money does a small business have to make to file taxes?

    If your small business or sole proprietor makes $400 or more annually, you must file taxes on that business income. Passing that threshold comes with new responsibilities and requirements, such as calculating and filing quarterly estimated taxes throughout the year. 

    Failing to file correctly, underpaying quarterly taxes, and other issues can lead to penalties and increased IRS scrutiny.  

    What questions should I ask a business tax consultant?

    The business tax consultant you’ll meet with will have questions about your business. You should also have questions for the consultant in the lead-up to or during the consultation. General questions to ask include: 

  • How long have you been doing taxes for small businesses?
  • What records should I keep?
  • What expenses can I deduct?
  • Do you have suggestions for managing my cash flow?
  • Can a CPA help me improve my business?

    • If you have unique or additional questions, ask during the consultation. Additional topics might include your business bank account and credit card, accounting software they use, tax credits, tax filing, and more. You must select the best firm based on your small business’s unique needs for tax time and beyond. 

    Book a consultation with 1-800Accountants’ trusted tax professionals.

    1-800Accountant is America’s leading virtual accounting firm for small businesses. Forbes rates us as the #1 full-service bookkeeping provider and #1 online accounting plan for small businesses by Investopedia. We have addressed the tax needs of over 100,000 small businesses, with thousands of satisfied owners voicing their approval on industry-standard review platforms such as Google Reviews and Trustpilot.
    Whether it’s small business tax preparation, entity formation, or any of our professional accounting services, we have the solution you need at a price that fits your budget. Schedule a quick consultation – usually 30 minutes or less – to learn how we can help.

    This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. 1-800Accountant assumes no liability for actions taken in reliance upon the information contained herein.