Working with a CPA will benefit your company.
There are many reasons that a business owner would look to switch tax preparers (lack of communication, no transparency, subpar service, major mistake, etc ). Whatever the reason is there are a few important things to note before you make this crucial business decision.
It May Be Time to Make a Change
The decision to make a change can be intimidating because you’ve been with your old tax preparer for years and you are accustomed to the traditional way they provided the service and delivered your tax returns. One very important thing to consider when you decide to move forward with a new tax professional is that some critical information can get lost which can result in losing significant tax deductions. The following items are the examples of lost information when transitioning from one tax preparer to another.
Examples of Lost Information
- Loss carry-overs
o NOL (net operating loss) carry-over
o Capital loss carry-over
o Passive loss carry-over
- Unused credit carry-over, such as energy credit
- Tax overpayment from prior year
- Home buyer credit and pay-back history
- Education credit history
- Fixed asset schedule - depreciated vs. un-depreciated
- Partners’ basis
- Vaguely labeled items, especially on the balance sheet of business returns
Supply the Proper Information
Tax preparers are not required to provide these key pieces of information to you with the tax return that they prepared, yet this information is extremely important for your future tax deductions. One great way to start your professional relationship with your new tax professional is to get on the same page regarding these items. An experienced tax professional would provide you a check-list for you to request from your previous tax preparer so you can stay organized and on top of it during the transition process.
New Jersey Requirements
The state of New Jersey requires licensed CPAs to provide all completed tax work and work papers upon the request of the taxpayer. However, only CPAs have to follow the rules and code of conduct. If your tax preparer is not a CPA then they pretty much can ignore the laws and rules in the state of New Jersey.
Work with a Professional
If you have a business and are in the process of selecting a tax professional, we recommend you work with a professional with CPA credentials so that you and your business can be protected from losing vital data and overpaying taxes as a result. This happens very frequently and is something we have helped our clients with in the past. If you are looking to make the change but are intimidated by the process you can always reach out to our firm at email@example.com . We look forward to speaking with you and assisting you as you look to make the right decisions when it comes to your business.
HOW SCHWARTZ IS HELPING SOUTH JERSEY SMALL BUSINESS OWNERS
Navigating these legal changes and what it means for your small business in New Jersey can be one of the biggest challenges you face in the coming years. Fortunately, Schwartz & Associates is already familiar with relevant tax laws and regulations you need to comply with, including the impact of the Biden Administration's new tax proposals. The American Families Plan (AFP) and American Jobs Plan (AJP) will bring with them new taxes on businesses in the coming year, and Schwartz is prepared to ensure your South Jersey business is not only in compliance but maximizing its benefits.
Contact us for more insight into what these changes may mean for your business specifically and what we can do to ensure you're getting the most out of your deductions.