We all know that there is no way to get around paying taxes. The question is what type of business tax service you will choose? You can always select an accounting firm, but you will be paying higher prices. You can use do-it-yourself tax software, but you might start second guessing if you did it correctly. You can take it to a seasonal tax preparation office but then may wonder if your tax preparer is fully qualified to do your taxes. Finally, you could take advantage of both worlds with a “hybrid tax software.”
We are all looking to:
- Save on taxes
- Make sure the process is easy
- Pay as little as possible for tax preparation
- No IRS problems
- Strategize for next year
Using a CPA firm has been the norm for years. The benefits are that you can count on the consistency and stability and that the doors are always open not just for tax season. They may offer tax planning services, and they certainly can prepare your taxes. With all that said, they can be quite costly with business tax returns starting at about $900 and up.
Larger business can be assured that they can handle returns with revenue over $1,000,000. It will usually take them several days to a week to process your paperwork, but another benefit is that they are using better tax software than many of the products sold to consumers.
The overall true benefit to clients is that in most cases, a CPA firm will save you time and the stress of doing it yourself. Depending on office structure you might even get a meeting with a CPA to go over your tax return in person.
Do-it-yourself Tax Software such as Turbo Tax Business is the most recognizable name in tax prep software. It is a very thoughtful, intuitive design to help streamline the tax filing process. However, currently, this software is still only a CD or downloadable product. It can help you prepare W-2’s and 1099-MISC Forms.
The software price starts at $170 and includes five federal e-files, and state preparation is extra. This type of solution works best if revenue is less than $250,000 and has fewer than five employees. On the downside, unless you know about tax returns, you may always wonder if you missed something. You also must set time aside from your busy schedule to prepare the taxes yourself.
You can quickly get frustrated and then it could easily take you a very long time to complete your return. A quick search online about Turbo Tax Business found many low reviews regarding customer support. Even on their website, it mentions support schedules can change without notice.
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A tax preparation office such as H&R Block is mostly open during tax season only. You run the risk that your tax preparer does not have the experience or knowledge you need to prepare your business tax return. These offices are for people who want reasonable pricing and who value speed and convenience.
Tax preparers at these offices do not know exact pricing as pricing is dependable on what forms must be filled out and the price fluctuates during the tax season as set by corporate. They are more trained to deal with individual tax returns than business tax returns.
Using a “hybrid tax service” is a new concept to business tax return preparation.
Halon Tax uses the data entered in QuickBooks Online or Wave to prepare your tax return, and it's done in a matter of minutes. The preliminary data goes to a financial review station where your bookkeeping is reviewed. It analyzes your financials, and if any problems arise, they inform you of the problem to correct yourself or for a small fee – all corrections could be done for you.
Once this process is done, it goes to three different CPA’s for review and your return is ready to file. Depending on the financial review and correction process, your whole tax return could be done in as little as 12 hours.
Halon Tax has three basic tax packages starting at $299 and their most expensive package at $599, it still is half the price of one CPA doing your taxes, and it comes with quarterly bookkeeping checkups and the CPA tax planning module. With the middle package road and elite package, you also get a review meeting where a CPA can explain to you line by line your tax return.
To see all the pros and cons easily, we have provided a table below that compares the four types of tax return preparation solutions you could choose from:
