This guest post is brought to you by our friends at MyCorporation
The introduction of the Tax Cuts and Jobs Act (TCJA) this year has left many eCommerce entrepreneurs wondering how the their businesses will be affected. While the tax reform law is said not to affect tax returns filed for 2017, eCommerce business owners are looking ahead to next year while filing for this year. Is it better to do taxes using software or should you switch to a professional tax preparer, if you aren’t already using one? We rounded up the pros and cons of each option for eCommerce ‘treps.
Many eCommerce business owners enjoy the ease and inexpensive format that comes with e-filing their taxes. There are plenty of options available for every type of filer too. Basic software like TurboTax guides individuals step-by-step throughout the filing process, pulls data from your past returns, and helps find every possible deduction while H&R Block Premium & Business Tax software works with businesses incorporated as S corporations, partnerships, and LLCs to navigate complicated forms with accurate calculations.
However, the bigger the business is the more details there are to account for when filing tax returns. Some entrepreneurs may seek out premium versions of tax software where they pay a higher fee to do their own taxes online or through a mobile app. Other entrepreneurs may enlist professional help with their tax returns to maintain peace of mind. Whether you decide to work with a software or not is generally determined by the complexity of your tax situation (especially if it has changed significantly!) and your own comfort level in doing your taxes.
Ecommerce business owners that struggle to figure out how to file their taxes, have questions about the TCJA, or need a little extra guidance may want to work alongside a CPA or tax preparer. The kicker? Working with a professional usually means paying more — significantly more — than you would with a software program, which is often considered to be a downside to the process.
Don’t look at it strictly from a financial perspective though. Professional tax preparers and CPAs are worth every penny when they work alongside small business owners and freelancers. Their familiarity with the tax code allows them to understand which write-offs and deductions are available for your specific situation. There’s the option to drop off documents to be prepared by a tax preparer or to sit with them during your appointment together as they walk you through the process. Tax professionals may also represent you before the IRS and tax prep fees can even be deducted on next year’s taxes!
If you do decide to work with a tax professional, schedule your appointment as soon as possible if you haven’t already and check the professional’s references. According to the IRS, it’s important to be mindful of scams and any business with a license no longer valid with the IRS. Reach out to family and friends for enrolled agent, tax preparer, and CPA recommendations and do your homework online by reading Yelp and Google reviews of their practice too.
Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation and Deborah at @deborahsweeney.