As a small business owner, filing your annual tax report may have required the use of a tax preparer, an expert who understands the complexity of tax filings specifically for small business owners. For those small businesses that are organized in a form other than a C Corporation, tax filing becomes even more complicated. If you used a preparer to file your small business tax return, you might think that the relationship is over once the filing has been completed, but that isn’t necessarily so.
Continuing your relationship with your tax preparer after April 15th has come and gone may be important, especially if any issues with your return arise. Having a relationship with a tax preparer provides you with support in the event that your return is rejected, if you face the prospect of an audit, or if you are preparing for next year’s tax filing. Read on for why it’s important to communicate with a preparer, even after the April 15th deadline.
Your Return Could Be Rejected Due to an Error
There are a variety of reasons why your small business tax return can be rejected by the IRS. A rejection does not mean that you are necessarily the subject of an audit, but rather some mistake was made that requires you to review, correct and resubmit your tax return. Mistakes that might result in a rejection include missing or incorrect information on the return, an incorrect Social Security or employer identification number (EIN), or if either you or the preparer simply forgot to sign the tax return. These types of errors will delay the processing of your return but can be corrected easily and simply, especially with the assistance of your paid preparer.
Your Small Business Return Could Be Subject to an IRS Audit
The odds of being audited by the IRS as a small business owner are fairly low: about a 1 in 104 chance. This low rate of audit is due to a number of factors, including budgetary constraints. Even if you are the subject of a tax audit, many of them are handled via the mail through an exchange of correspondence and information rather than face-to-face in an IRS office (These are technically not considered “Audits”).
If you should happen to get audited, it would be helpful to be able to rely on the experience and expertise of your preparer. Your tax preparer may even be able to represent you, should a meeting be necessary to resolve some discrepancy. Your best chance for surviving an audit will come from having a tax professional who is knowledgeable about the process and can help guide you through it.
You Need to Prepare Withholding and Quarterly Filings for the Next Tax Year
Tax season may be over, but it’s never too early to start preparing for next year. The process of managing your tax filing for the next year includes the filing of quarterly withholding forms for Social Security and unemployment taxes as well as estimating your personal tax liability. Maintaining contact with your preparer will help you manage your small business tax process and put you in a good position when you have to file your next tax return.