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Bookkeeping for Easier Tax Prep | Supporting Strategies

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How Bookkeepers and CPAs Team up at Tax Time, and Beyond

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Learn how outsourced bookkeeping and controller services support time- and cost-efficient tax compliance and advisory CPA work.

Taxes … ugh!

Tax laws require most businesses in this country to file an annual income tax return. However, they’re so complex and change so often that it’s very tricky for the average business to comply on their own. Certified Public Accountants (CPAs) and IRS Enrolled Agents (EAs) are licensed professionals who devote years of study to mastering tax laws — not just to help their clients comply with the laws, but also to employ strategies to minimize tax expense.

Like lawyers, doctors and other licensed professionals, CPAs and EAs are experts in their field. They invest countless hours each year on continuing education to stay sharp on the ever-changing income tax laws.

Within the field of tax accounting, there are as many specialties as there are different types of taxes. And just like lawyers and doctors, licensed tax professionals tend to specialize their practice. Some focus on the complexities of cross-border taxation issues, for example, while others find a niche such as supporting the income tax compliance and strategy needs of real estate investors, startups or nonprofits.

Setting the (Tax) Table
Just as a trial lawyer relies on paralegals to prepare their case files and a cardiovascular surgeon relies on nurses to prepare the operating room, CPAs rely on bookkeepers to prepare the books properly before their tax work can begin. High-quality bookkeeping enables CPAs to be as efficient as possible with their time while maximizing the benefit to their clients in the form of accurate compliance as well as strategies for minimizing and deferring tax expense.

The first step toward a stress-free tax season is to enlist your bookkeeper to compile accurate, up-to-date financial records all year long. Airtight records simplify the handoff to your CPA, allowing them to focus all of their attention and experience for your benefit.

Getting More for Your Money
The value of high-quality bookkeeping can go much further than the income tax return. While a CPA simply needs to see a summary-level view of the past year’s financial activity to prepare a business income tax return, savvy business leaders need a lot more from their back-office team.

Beyond keeping score, experienced bookkeepers can skillfully handle a broad variety of day-to-day back-office functions for businesses, including billing and collections, payroll administration, expense reimbursements, paying bills and more.

The best bookkeeping service providers can also thoughtfully record business financials in a way that delivers key insights into business performance throughout the year while also providing accurate, summary-level financial results for the CPA without duplicating efforts. In these ways, smart business leaders are able to get maximum value from both their bookkeeper and their CPA.

Keeping up with your bookkeeping throughout the year can raise important questions regarding your tax liability and degree of compliance with all relevant local, state and federal tax requirements. It can also highlight potential strategies to employ for reducing or deferring tax liabilities before the year is over and the window of opportunity closes. Having an experienced bookkeeper proactively prepare and share those tax-planning questions and insights with your CPA makes for the most effective collaboration between those two key financial specialists.

Ready to Turn the Page?
2020 stress-tested many businesses to a degree they've never experienced before. Having seasoned bookkeeping and controller services professionals as well as a CPA on your side can help you put 2020 behind you as quickly and painlessly as possible — and position you for much better things in 2021.

At Supporting Strategies, our experienced, U.S.-based professionals use secure, best-of-breed technology and a proven process to provide a full suite of bookkeeping and controller services. Are you ready to learn how you can move your business forward? Contact Supporting Strategies today.

Mark Wald

Author:

Mark Wald

Mark is managing director of Supporting Strategies | Santa Monica, CA.

Legal and Tax Disclaimer

This website is created by Supporting Strategies to provide general bookkeeping and accounting information only. Supporting Strategies does not provide tax, legal or accounting advice, and the information contained herein is not intended to do so. As such, the information provided should not be used as a substitute for consultation with professional tax, legal, and accounting advisors, and you should consult with a tax, legal and accounting professional before engaging in any transaction.