We’ve said it before. Taxes are complicated, especially if you run a business. But Dave McLaren, CPA, CGMA, CRFAC, ABGOV, RFI, CRFAU and Founder of McLaren & Associates CPAs, PC in Shrewsbury, has a great way of making them seem a little less, well, taxing, particularly when it comes to explaining the difference between using a tax preparer or planner.
For that explanation, Dave likes to use a simple analogy.
Imagine for a moment that there’s a problem with your car and you need to have it fixed. You have two options:
Option 1: You can take a bag of car parts to your nearest “Quickie Fix” and ask them to fix your car while you wait.
Option 2: Take your car to a reputable mechanic to pinpoint the problem and learn about ways to get your car running more efficiently.
You’d probably choose Option 2 even if it cost more, since most of us aren’t experts in fixing everything in our cars.
Now imagine that instead of repairing your car, you need to file your business taxes. You could bring your financial information to a tax preparer or use an online tax preparation service that will take your numbers and send your return off. Your taxes will be done quickly, but you probably won’t know about changing tax laws that could potentially benefit your unique business situation. And that means you could end up paying much more. Ouch!
Now imagine you choose another option – you visit a tax strategist or planner. A good tax planner not only keeps abreast of ever-changing tax laws, but also applies them to your unique situation and guides you with making the right elections and choices. You’ll end up paying more than if you used a tax preparer or online service, and you’ll have to wait longer, but you’ll walk away with a significantly lower tax bill. #Winning!
“The average business can save up to $10,000 a year when using a tax planner,” adds McLaren.
Proactive guidance – all year long
A good tax planner offers another advantage – guidance throughout the year that can help your business. Recently, for example, Congress passed a 5,500 page COVID-19 relief bill. McLaren will not only study those laws, but also see how they can benefit his clients. So, say your business received a Payroll Protection Program (PPP) loan in 2020, McLaren will help you understand how the new tax laws from the bill will impact the deductions your business can make.
In addition to helping you maximize tax savings, a good tax planner can identify potential red flags that could lead to an audit, a business owner’s worst nightmare.
Get in the driver’s seat with tax planning.
To learn more about how tax planning could potentially help you save, contact Dave or a member of his team at McLaren & Associates CPAs, PC at 508.842.0459 or visit them online,