By addressing your own financial work in the early days of running an LLC, you might be able to save yourself some money, but as calculations start to get more complicated, you may find yourself increasingly short of time to devote to your taxes, and without the necessary knowledge, too.
But do LLCs really need an accountant?
Let’s take a closer look:
LLCs & Accountants
Hiring an accounting firm in Miami certainly isn’t a legal requirement for American entities, but there are few successful businesses who don’t work with at least one accountant or accounting firm.
As financial experts, accountants can help business owners get a better understanding of the profitability of their LLC, cashflow, and overall financial path through detailed financial reports. They can also help you to reduce your taxable income and overall liability, by preparing and filing your company’s tax return, and identifying any deductions you may be eligible for.
Below are the functions an accountant typically carries out for LLCs:
- Analysis of financial information
- Financial modeling
- Tax prep and filing
- Financial advisory
- Financial management
- Financial statement preparation
When should an LLC hire an accountant?
Timing can be critical when it comes to hiring an accountant as the owner of a small business, particularly as the decisions you make early on about structuring and bookkeeping, can have tax consequences that impact the company for many years to come.
Ideally, an accountant should be hired as soon as you go live with your LLC, but as around 20% of new businesses fail within the first two years, you could be forgiven for wanting to wait a little longer.
However, if you’ve observed any of the following signs, hiring an accountant quickly could prove fruitful:
- Your LLC is a multi-member one – an accountant can help ensure tax reporting is accurate for every partner
- You cover your employees health insurance premiums – payroll taxes and deduction eligibility get complex when employee benefits are introduced, an accountant will take care of this
- You’ve recently altered your businesses tax clarification – tax obligations change if you switch from one entity type to another; an accountant can ensure you take advantage of any new benefits
- Your LLC is earning between $75,000 and $10,000 a year – an accountant (whose services are deductible) will help you reduce your taxable income and make sure you get to keep more of what you earn
- You’re about to upgrade to a new system of bookkeeping – a tax expert can be immensely helpful when migrating to a new bookkeeping system, and can make the transition as smooth as possible
The many benefits an accountant can help your LLC unlock
From maximizing deductions, helping you make accurate and timely submissions for quarterly estimated taxes, helping you decide if S Corp status could save you money on your taxes, and supporting you through long-term financial decisions with income statements, cashflow forecasts and balance sheets, working with tax services in Miami on a year-round basis will help your LLC unlock a multitude of benefits.
Keeping your LLC compliant while also giving you the kind of financial clarity you need to grow, hiring an accountant can prove to be an invaluable choice that more than repays your investment, particularly when you consider the savings they can help you make every tax season.
