tax return

Five Steps to Take to Get the Cheapest Tax Return Quotes

Five Steps to Take to Get the Cheapest Tax Return Quotes

Image by Images Money.

 If you’re self-employed or the owner of a small business, it is usually much more worthwhile outsourcing your tax return to an accountant than doing it yourself.

Even if you can do it quickly and efficiently, having an accountant fill out your tax return reduces your chances of making expensive mistakes one way or another – either incurring large fines for underpaying, or overpaying where you don’t need to.

If you balk at the prices you’re initially quoted, don’t worry! That’s why I’m here. With these five easy to follow steps, you can get a cheaper quote for your tax return, making the whole procedure that much smoother and easier.

1. Organise Your Accounts

“Wait! Surely that’s my accountant’s job?”

Not really.

Or, more accurately, yes that is one skill an accountant should have, but it’s additional work on top of filing your tax return correctly. Organising your accounts is one thing, and it’s something you can do yourself with complete accuracy.

Interpreting your accounts, and knowing what to do with them and say about them is a completely different thing.

If you organise your accounts, you can knock a sizeable chunk off the accountant’s fee!

2. Be Prepared To Travel

Accountants in the city can often be cheaper than accountants in the country and suburban areas, especially in wealthier areas of the country and suburbs.

This seems counter-intuitive but is actually perfectly logical. There are more accountants in large financial centres, therefore there is more competition for work. Where there is more competition, prices plummet.

For a different example, the sorts of accountants London businessmen will call upon are going to be completely different from accountants in more northern cities such as Birmingham. They will have different areas of expertise, and much more expensive fees – you might end up paying more for less!

If you are able to travel further abroad to check for accountants there, do so. You will usually find a cheaper quote.

3. Check For Low-Income Help

If you are on low income, you are likely eligible for programs to help with your tax return.

In the United Kingdom, for instance, you can visit free workshops designed to help freelancers with simple tax returns, while in the United States of America you could get your entire tax return completed for free under the VITA program.

Note that definitions of low income vary from place to place. In America, for instance, the IRS will give VITA places to people on incomes of under $50,000 p.a., which would be a huge amount in some parts of the world.

4. Do Your Taxes Early

As deadlines approach, accountants are able to take more and more liberties with the prices they charge. A desperate customer will pay more-or-less anything.

Hire an accountant to do your tax return sooner rather than later, and it should be much cheaper.

5. Move Online

The key difference between looking for an accountant offline and looking for an accountant online is that online, the accountant is also looking for you.

This means that you are in a much stronger bargaining position. If a quote isn’t quite low enough there are a thousand other accountants clamoring to do the same job for a price that fits your budget.

If you do hire an accountant, I recommend that you do use an online service in some way or other.

How Much Is ‘Cheap’?

Really, ‘cheap’ depends on your circumstances.

For someone doing a small but complicated range of self-employed and freelance work, cheap might be £100-£150, because they can’t afford to make a mistake, but they equally can’t afford to employ the best.

For someone who earns all their income from one source, by contrast, it might be unthinkable to pay more than £30 for a tax return.

On the other end of the spectrum, someone running a moderately successful small business with disorganized records might expect to pay a great deal more.

It’s all based on where you are, and deciding what’s right for you. Whatever you do, take your time, prepare, and don’t rush into anything!

James Duval writes about personal finance for Choose Your Accountant, who offer an online portal for accountants in London to accountants in Birmingham.

Image source : http://www.flickr.com/photos/59937401@N07/5857143056/in/photostream/


5 Top Tips to Avoid a Tax Audit

5 Top Tips to Avoid a Tax Audit

We all know taxes are a necessary part of our lifestyles. We need schools, emergency services and government. What we really don’t need as small and medium business owners is a comprehensive tax audit. Tax audits are a very lengthy and involved process, which usually calls for the services of a professional, so if there is any way to avoid being highlighted as a company that requires such an inspection, you can be sure your profits and costs will benefit from taking the appropriate action. Here are 5 top tips to help you avoid becoming one of this year’s tax audited companies.

1. Complete your return thoroughly and competently

Tax returns with calculation errors or prices of information missing will immediately flag you up to the tax authorities as someone who needs some help and an inspection. Make sure whatever you declare on your tax return can be easily matched up with what you have filed on PAYE or any other payroll system you are using, and be sure to fill in the form legibly, as forms the computer can’t understand will automatically be sent for checking.

2. Include ALL income, even that which you feel is insignificant

Whether you loaned the services of an employee to a business associate for a week, or sold your old computers on eBay, all these incomes should be stated on your tax return whether you deem them to be important or not. Similarly if you had capital in the bank that was accruing interest, or got paid on dividends during the last financial year, the best strategy is just to declare it all and then there is no grey area to investigate.

3. Check your income compared to last year

If you suddenly have an abnormally high income compared to last year, or even a really low one, this can raise a red flag to authorities and instigate further investigations to be made. If you have genuinely had a very different year to last year, then this just has to be swallowed and the potential for a full tax audit has to be dealt with, but if you are reporting an unusual income because of miscalculations or omission of some expenses, this should be easy to fix.

4. Itemized deductions

Of course you are entitled to the usual tax deductable expenses, whether these be cars, equipment or sustenance. However, be aware that if these deductions run to several pages of listings you will invariably be investigated by the auditing authority as this can highlight a potential problem to them.

5. Self employment

You can’t help working for yourself; indeed it is a commendable achievement. However, it does put you in the firing line for a tax audit, so make sure you have all your books in order all year round, so that audit time is not a stressful experience for you. If you have a small business that continually shows losses, the tax authorities may well start investigating deeper, so make sure anything you have put down as expenses actually is an expense relating to the business.

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