For individuals with simple personal tax returns, employing an accountant may not be necessary. But for business owners and those who earn their incomes through multiple channels, yearly taxes may get more complicated. This is why it’s very important to find a skilled accountant to help you file taxes in a timely fashion using strategies that yield high returns. Elite NP highly recommends that your tax specialist be a certified public accountant (CPA).

Employing the services of a mediocre accountant may result in low returns or in the worst case scenario, an exorbitantly high tax bill. Many CPAs do not have a detailed understanding of tax code, legal loopholes, and available deductions for small business owners. Elite NP discusses the importance of tax saving strategies here.

What are the benefits of using a CPA as a business owner?

Many business owners are not utilizing the full list of legal tax reductions that the IRS offers to small business owners. Many business owners filing with unskilled accountants will wind up with unnecessary tax bills, when they may have actually been eligible for a return. As your business grows and your yearly income increases, you may be bumped into higher tax brackets. This is why it’s important to employ a good accountant—they can help an NP business owner keep track of their finances and owe less per year.

For the NP entrepreneur, taxes might be the number one expense in your life. The good news though, is that this is an expense that you can legally decrease. Many lawmakers own businesses and invest in real estate. Therefore, it’s in our leaders’ best interest to give kickbacks to fellow business owners. This is why it’s important to stay in the know on all of the benefits available to you.

How do I find a good accountant?

It may take some shopping around to find a quality CPA. You may go through more than one before finding someone you work best with. Elite NP recommends interviewing multiple accountants before employing one to file your taxes for the year. You need to pick their brain and ask them some important questions:

• Can you tell me all the legal tax deductions I can utilize through my small business?
• Do you have experience with my kind of business/practice?
• What records do I need to keep?
• What are your fees? (A detailed tax return that saves you a lot of money will cost $1,000 to $1,500. This is money well spent).
• Can you represent me during an IRS audit?
• What is your personal tax philosophy? (Make sure they are assertive and aggressive, yet cautious)
• How often should we meet?

Green flags for a good accountant

According to retired IRS tax attorney Sandy Botkin’s book Lower Your Taxes- BIG TIME!, it’s important to hire an aggressive accountant. If they are timid, find another one. It is better to be more aggressive than not. It is also important to find an accountant that is ready, willing, and able to represent you during a potential audit. It’s also a green flag if your new CPA offers to see you on a quarterly basis to keep a close tab on your revenue, income, and tax obligations. This is important because you can then utilize various strategies throughout the year to stay compliant and lower expenses.

What if I get audited?

There is always a risk that you and your business will be audited by the IRS. If this happens, it’s important to stay cool and collected. The threat of a potential IRS audit is why it’s important to keep detailed records of your expenses, income, and write-offs for the year. More documentation will make it easier to defend yourself in the event of an audit.

If you get audited, you will need to pay the full amount you owe the IRS. You won’t go to prison unless you are committing tax evasion. Your CPA is a licensed professional, just like you! They will not help you evade taxes and break the law, just like you wouldn’t purposely overprescribe narcotics or kill a patient. Therefore, feel confident in your CPA’s abilities if they are truly helping you lower your tax bill.

Don’t get stuck paying unnecessary taxes

Many CPAs are data entry-focused, and don’t fully understand tax code. You need to find a great CPA who knows tax code top to bottom, or hire a tax attorney that does. That might be going overboard for the nurse practitioner who is just starting a business, so a knowledgeable CPA might be sufficient until you begin generating significant revenue.

Finding a great CPA is not difficult. It just takes a little time. That extra time you spend finding one will pay for itself in no time. When you start making some serious money, your tax situation becomes much more complicated than just a simple W-2 salaried tax filing. Therefore, it’s important to practice good tax mitigation strategies. In addition to employing a great accountant, you can become more tax savvy by enrolling on one of Elite NP’s specialty tax reduction courses.