It’s hardly surprising that big-box stores are among the most profitable retailers in the United States. If your shopping list includes bananas, a power drill, new shoes and wiper blades, you could make trips to four separate stores—or find everything in one trip to your local Target or Walmart. Having your small business accountant prepare your individual return is the tax-time version of one-stop shopping.
Preparing your taxes is a much higher-stakes proposition than shopping for produce, of course. It’s also a lot more time consuming. For small business owners, consulting a business tax accountant and a personal tax accountant makes tax time harder than it needs to be. It’s certainly more efficient to work with one small business accountant to meet all your tax obligations, and there are other benefits too.
Sole proprietors will often work with just one small business accountant or firm because their tax filing requirements tend to be fairly straightforward. Sole proprietors aren’t required to file separate personal and business tax returns, instead reporting business income as part of their standard 1040 tax return. It just makes sense to have one person or one firm complete everything for the IRS.
If a small business is taxed as a corporation, the owner needs to file their business taxes and personal taxes separately, but the same person or firm can still help them prepare both. Small business accountants generally have a broad understanding of federal and state tax law for both businesses and individuals, so there’s no need to look for two different accountants. Whoever you trust enough to manage tax preparation for your business should be qualified and capable of preparing your personal taxes too.
There are also logistical benefits to having your small business accountant complete your individual tax return. It can certainly be more efficient and more affordable than using separate services. You only need to prepare and submit one set of documents and schedule one meeting to review and sign your returns. Plus, busy business owners don’t have time to answer the same questions twice while they’re trying to grow their business. Having one point person managing your personal and business taxes is easier than playing phone tag and scheduling meetings with two accounting firms.
One of the primary reasons you might choose to have your small business accountant prepare your individual taxes is that, as a small business owner, your personal and business finances are intertwined. Your business’s financial status may affect your family’s financial status and your personal financial goals. When you sit down to review your business and personal tax returns, your small business accountant can help you get a more complete picture of your financial standing. Your small business accountant can provide insights into your overall financial health and craft recommendations that may help you minimize both your business and personal tax bills next year. So, yes, using one accountant simplifies this year’s taxes— and it’s also a key part of a successful long-term tax strategy.
All that said: What works for many small business owners won’t work for all. Sometimes a small business owner has personal reasons for wanting to treat their business and individual taxes separately. Married taxpayers may need to consider their spouse’s tax needs as well as their own. And sometimes a business owner’s tax scenario is so complex that they want to work with a specialist with niche experience. But for most small business owners, having the same small business accountant handle all their tax prep makes sense both fiscally and logistically. It’s one small way to take the stress out of tax time.
The tax team at Sachetta has a deep wealth of knowledge around both business and individual tax issues. We understand the unique tax obligations that affect small business owners, and we’re here to make tax planning and tax preparation as efficient and painless as possible.
What questions or concerns do you have about small business or individual tax preparation? I’m happy to help. Contact me today!
Stephen Sachetta, CPA, MST is a Certified Public Accountant and holds a Master’s Degree in Taxation. He has a diverse background of experience in the public accounting field over the past 40 years, ranging from the former Big 8 to being one of the founding partners of our firm. He specializes in the Restaurant and Food Service Industry and works with individuals and small businesses at developing them into flourishing companies while helping them to save tax dollars along the way.