There are only about 16 deductions available to s-corporations (which can included LLCs); so if an accountant found something, it was because you overlooked it. There are no magic refunds/deductions. The tax code is the tax code. All possible deductions are covered in Turbo Tax, provided you can read. Turbo Tax does not have a lie or break the law function. So rest assured. Use it.

My background is business and law. When I worked with and for accountants, they like many attorneys, didn’t know the law. Do some research; accountant error rate is about 26% on the returns they do. Self-filers (business) is about 10%. 3% scares me; you cannot be that accurate in 1.5 hours sitting in an accountant’s office. And, at tax time, accountants grind ‘em out just like McDonalds. They are, after all, in business to make money.

As for expense control, any business coach can tell you how to save time, money and effort. Again experience is better than a degree in running a calculator. And a much better value.

CPAs are not management accountants. Management accountants run corporations, not CPAs (and make $80,000+ per year). Just like the lawyer on the corner is not a corporate lawyer just because he knows more about starting a corporation than you. Corporate counsel run corporations (and make $400,000/year), not the guy on the corner who also does divorces. If you can afford a $400/hour corporate attorney, you should not be here reading this.

As my comment above says, accountants have their function, as do attorneys. Use accountants for accountancy (not business formation and taxes) and attorneys for litigation (not company forming) and complicated contracts. Use QuickBooks & Turbo Tax for taxes. Find area specialized coaches for other things: marketing, business plans, seminar production, affiliate programs, etc. You be glad you did, be all the wiser and have some money left over in the end.

https://www.jamesallencorporateservices.com

I appreciate everyone who commented to share their own experiences or perspective about whether or not a freelancer should use an accountant.

So generally, for bookkeeping, report generation (P/L, cash flow,annuals), payroll, etc. an accountant is not needed if you are running the accountant version of Quickbooks and doing taxes with Turbo tax. If you are soliciting investors, loans, financiers or selling stock, then certain certified reports may be necessary. If you are lucky enough to be at that level, a relationship with an accounting firm is required. Be forewarned, they are most likely using the same software, so you have be using that software correctly and be up to date (current in record keeping). (The accountants might use Sage/Peachtree, but I find their products generally unfriendly and pricey.) If you aren’t running QBks correctly and current, the fix at the accountant’s office can be pricey.

QKs is simple; don’t assume you are smarter than the program; trust is a must. Back-up daily until you are confident–corrections are challenging (a safe guard to foil people cooking the books). If you err, restore to the last back-up and begin again.

If data input (rote bookkeeping) is your weakness, (accountants don’t do that; their assist might for the accountant wages, but they do not), then you need a bookkeeper, not an accountant. Big cost difference.

The high quality and simplicity of QBks is scary. Be glad Intuit is not operating in your area of expertise…

Finally, all accountants are not created equally. Just because they went to school doesn’t mean they understand business, or more specifically, your business. They are generally unloyal, so do not hesitate to dump one you don’t like.

QBks/Turbo Tax cons: Regular up-dates and new versions every year; you must repurchase QuickBooks at least every two years; sadly Intuit is a big proponent of MSFT and their bloated, insecure OS–expect future versions to require either Vista or Win7. Turbo tax is only good for the year purchased and incessantly updates….

A friend of mine runs his own company and he decided to hire an accountant a year ago and said he didn’t realize how much it would help.

If I ever find myself in a position where I need one I wouldn’t hesitate to hire one.

When I was a child I wanted to be an accountant, how weird is that!

So I am going to play both sides. I started out as an accountant, so I have an advantage. I have evolved into a business coach and my main service offering is project management. My benefit, I am my own accountant.

Now – that being said – most freelancers can do their own taxes if they can properly maintain their books. I state this, because my accounting company specializes in Small Business/Freelancers bookkeeping and taxes – and the root of all evil is the bookkeeping. I know, many people think ‘no it is the IRS tax forms’. Not true, if your books are clean and you know how to categorize your books, a program like Turbo Tax will do the deed for the majority of small businesses and freelancers.

The main problem I always see, is small business owners who don’t know how to keep their own books.

So think about hiring a qualified bookkeeper first, and not just any bookkeeper, a certified one, one with liability insurance and one that has specifically worked in your field. (i.e. my team has bookkeepers with industry/field specialties – one in property management, one in website design and development) – because what is classified one way in one industry won’t be classified in another.

That being said – a qualified accountant – that is not part of a large firm – and specializes in small business will charge $400 – $1000 depending on the size of your business for tax preparation. I would be hesitant to hire anyone charging less than that, because chances are they are not insured, bonded or have their certifications up to date.

Most people just go to an accountant. Do your research, find an accountant that deals with your field. You will be surprised how much more they know from account x or y about your field. That is their business, that is what they do on a daily basis. Unless your freelancing job is accounting, it is something you will never fully understand.

Past year, a little rule tax changed which saved me quite a bit of money. If I was doing my taxes myself I would never know of this change. Yes, I do pay my accountant a little bit more than a personal accountant, after all, my company is incorporated, but at the end, the accountant was worth every penny, because he saved me more than couple thousand in taxes.

So, when is the right time to get an accountant? When your business is your main income and you want to save money….

Sorry, my comments were not against your article. I thought you raised some very good points. And yes, it was well balanced and well thought out.

My comments were geared towards those who those who believe they are saving money by doing it themselves, and my intent was simply to point out the fact that, at least in my opinion, we should be hiring the right people to do the job.

I honestly do not believe that we are doing ourselves any favours by trying to perform all the various duties that a business demands, even if it may be one that is just starting out and only brings in a few hundred dollars a month.

My argument is simply that there are people who do certain things very well. I can create a database and program a site around it – I also know that there are people who are much better and faster at database design and programming than me. So I hire those people to perform that work, while I concentrate on the things that I am good at. In the same sense, there are people who are good at numbers, know the tax laws, know how to save me money and can advise me on best practices, so I hire them to look after my finances.

By hiring the right people, I free up time that allows me to concentrate on growing my business, and I generally save as much money as I pay out to my bookkeeper and accountant. I do understand the desire and the draw to try save some money by doing some of the stuff ourselves, but I honestly just feel that we are doing more harm than good by doing so.

Just my two cents. Sorry if I seemed harsh in my earlier post. That wasn’t my intent.

But for tracking expenses, invoices, etc. the tools are so easy that it’s easier for me to do it myself than to put it together and pass it to somebody else. I tried once. it too the same amount of my time. Then when needed I pull the P&L and Balance sheet reports and give them to my accountant and he only bills me for his added-value work.