4 TIPS TO LOWERING YOUR TAX PREPARATION FEES

With a post-recession economy, individuals and businesses are looking for ways to get more but payless. I’m a firm believer you can control your accounting and tax preparation fees by simply making your accountants job easier, thus passing the savings onto you. I like to reward my clients with cash back into their pockets by lowering my fee if they are well-organized, have clean books and/or did the appropriate reconciliations. The cash back savings can vary depending on the complexity of the return and forms needing to be filed. However, here are your 4 tips to lower your tax preparation fees.

STEP 1: DO NOT DROP OFF A BOX OF RECEIPTS

Dropping off a box of receipts with no organization structure is one way to increase your tax preparation fees. It’s important to remember there are plenty of ways and systems to keep your receipts organized thus can make your life easier. Some of them are even FREE! I don’t know about you, but free is always in my budget! You have to remember everybody learns differently so some recommendations on record keeping are better suited for certain individuals. Don’t be afraid if there is any way to lower your tax preparation fees by having clean records. 

STEP 2: DO NOT MIX PERSONAL AND BUSINESS EXPENSES

If you have a business, then it’s important you do not mix personal and business expenses. This could develop into a nightmare leading to unexpected accounting and tax preparation fees. More importantly, depending on certain criteria,  you do not want to run into a situation where the courts rule that you pierced the corporate veil. Let’s breakdown the basics, one personal bank account, one business bank account, a personal credit card and/or a business credit card for all your spending needs. This will help you separate your business and personal life spending habits and keep your tax preparation fees inline with the going rate.

STEP 3: RECONCILE BANK STATEMENTS AND ATTACH ALL RECEIPTS

Do you have Schedule C needing to be done? Well, when you are reconciling your bank statements you should attach all the receipts. Let’s be honest, some people cannot even remember what they did yesterday or last week so how are you going to remember what a purchase was for several years from now? You simply won’t. So keep track of it monthly to make your life easier down the road. You should have an accounting system in place to track all activity, which your accountant should be recommending for you. This will help save your sanity and keep your accounting and tax preparation fees lower.

STEP 4: SUBTOTAL ALL REVENUES AND EXPENSES FOR YOUR BUSINESS

If you subtotal all revenues and expenses, then you are on your way to lower tax preparation fees. You have to keep in mind the less time our CPA’s need to spend on your tax return the cheaper your return could be. Also, as a business owner have a sense in pride on keeping your books clean and in order. You never know when you might need funding and having clean books will sure speed up the process with the lender.