3 Compelling Reasons to Hire a Tax Consultant
There is a tendency among small-scale business owners to hire a tax accountant after getting in trouble with their finances. It is no wonder small startups struggle with regular cash flow. Besides, most startups hire an accountant to double up as a tax consultant, only to end up regretting the decision down the line. Given, hiring a tax consultant might cost you more than an accountant, but you save thousands of dollars down the line. Here are three compelling reasons to hire a tax consultant.
Maximise Business Deductions
Deductions are a great cash source for small businesses, but only if you can accurately identify all deductible items over a full tax year. Unfortunately, an accountant might not identify all deductions, meaning that your business will most likely lose money if you rely on their services on a long-term basis. A tax consultant is well-versed in taxation matters and can easily identify all potential deductible items in your financial records. For instance, if there are significant deductions that you failed to claim the previous year, a tax consultant will identify and include them in the current year's returns, improving your financial position.
Minimise Tax Liability
Paying taxes is considered a moral and civic duty, and clients would not want to partner with a business that evades tax. That said, taxes can take a toll on business operations; therefore, it is normal for business owners to look for ways of reducing the amount payable to the ATO (Australian Tax Office). Unfortunately, only a few startups can achieve the objective. However, a tax consultant can help your business navigate the complexities of short-term and long-term tax optimisation. For example, a tax consultant might advise you to channel a portion of your income towards charity in your community. Notably, donations are non-taxable, which lowers your tax liability.
Tax Law Compliance
The government's awareness about tax evasion has increased over the last couple of years, evident from the constant updates and new tax laws to close the loopholes. Although an accountant might understand the statutes, staying up to date can be tricky since tax is not their forte. A tax consultant's job revolves around tax compliance and implementation; therefore, they are better placed to help you stay compliant with existing, amended, and new tax regulations. You no longer have to worry about tax compliance when you file your returns through a tax consultant.
For more information, contact a taxation consultant in your area today.
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