Get a business boost with payroll and sales tax consultations

Payroll tax and sales tax management are a headache at best and, at worst, a way to trigger an audit.

But is it worth bringing in outside help to deal with them?

Today’s post will cover that question and give you the benefits and costs if you decide to bring in a tax professional.

Let’s go!

How to know if you need payroll or sales tax help

One of the more obvious signs is compliance concerns. If the tax laws surrounding payroll or sales tax seem confusing, it’s because they are.

So, if you have lots of questions about tax laws or you’re losing sleep over it, then some help is in order.

Of course, if you’ve run afoul of the IRS or state/local taxing jurisdictions for past tax indiscretions, then it’s definitely time to bring in expert consultants.

Business complexity is another indicator. You know sales tax laws can vary wildly if you operate in different states. Keeping up with them is nearly impossible without outside help, especially if you are selling multiple products.

That level of complexity requires time to understand, something that entrepreneurs always seem to be in short supply of.

So, if you find that dealing with payroll and sales tax concerns is distracting you from running your business, then it may be time to bring in a consultant.

Finally, rapid growth or significant changes like new products or employee structures may be another indicator. If those dynamic variables impact your business, outside help can lessen the chance of compliance issues.

At this point, you may be thinking about getting help, but you also probably want to know if the benefits are worth the cost.

To find out, let’s break the benefits down into separate services.

Benefits of Sales Tax Consultation

Arguably the biggest benefit of a sales tax consultation is gaining a crystal-clear picture of your obligations. Realizing that benefit helps you better understand financial obligations so you can do more strategic financial planning.

You can also use the information to identify potential exemptions or deductions you may not have known prior.

Both benefits can help your business retain more revenue, but equally important is compliance.

When you make sales tax mistakes, you run afoul of state and local authorities.

Those mistakes can become a matter of public record, hurting your business’s reputation.

And, unlike money, once a good reputation is lost, it isn’t easy to regain.

Of course, the same can be said for payroll tax consultation, but there are a few differences between its benefits and sales tax. Let’s look at those now.

Benefits of Payroll Tax Consultation

Proper employee classification isn’t always cut and dry. In fact, the IRS tests can be mind-numbingly difficult if you aren’t well-versed in them.

The same goes for tax withholding requirements and filing requirements. However, ignorance of the law is not a reasonable defense, so having someone competent in all facets of payroll taxes can save you lots of sleepless nights and potentially quite a bit of money.

It can also reduce payroll errors and help you avoid unhappy employees. And like sales tax consulting, there’s even a chance a consultant may uncover some unknown tax deductions.

Cost-benefit analysis

So, all these benefits can save you money, but it still must be enough to justify the expense of a consultant.

Rates can vary based on a number of factors but be prepared to pay $100 to $300 per hour for good consulting. If a flat rate is charged, the cost could be $2,000 or more, depending on the service.

If monthly retainers are required, the bill could range from $500 to $3,000 per month, depending on the scope of services.

The Bottom Line

Payroll and sales tax consulting isn’t inexpensive, but it comes down to a cost-benefit analysis. If you find yourself a candidate for consulting, it’s important to know how much you stand to lose or, for that matter, gain by bringing in a consultant.

Be sure your analysis includes time off task, potential legal fees, and potential lost business when making the decision. Then, make the right decision for your business and its future.