The small-business owner and the taxman
Eli C. BortmanLecturer in law
Small-business owners want to hear from lots of people -- except for Uncle Sam. If it's your business, then it's your business to hire a capable accountant to manage your tax filings and returns. In this interview, Eli C. Bortman, lecturer in business law at Babson College, discusses the structuring of small businesses and keeping the Internal Revenue Service happy.
What suggestions can you give a new small-business owner about paying self-employed taxes?
I would urge a new small-business owner to put himself or herself in the hands of a capable accountant -- a solo practitioner or someone in a small firm. I suggest an accountant because the businessperson ought to focus on the core business and not have to worry about the intricacies of tax filings and returns. A solo practitioner or a small firm (are good choices) because that sort of accountant knows what it's like to be a small-business owner. But get some references; have assurance that the accountant's competency extends to taxes. We hear horror stories from time to time about accountants who are not competent when it comes to taxes.
The business owner should feel confident that the accountant can handle the mechanical issues of knowing which forms to file and when, as well as being savvy enough to advise on tax strategies. That's actually the lead-in to your second question.