How much should a small business owner (LLC) pay for tax preparation?

Do you think there's any benefit to staying with the more expensive option if they offer "audit protection"? I've heard that's valuable for small business owners. Also, does using an LLC vs sole proprietor significantly impact the tax prep cost?

Audit protection can be valuable, but it should only add $50-150 to your tax preparation cost, not double it. The real value is having a competent preparer who doesn't make mistakes in the first place, as incorrect filings increase your audit risk. For an LLC with your structure (assuming single-member), the tax treatment is typically the same as a sole proprietorship (Schedule C) unless you've elected different tax treatment. The complexity of your business transactions and deductions impacts cost more than the business structure itself. Multiple income streams, significant business deductions, home office, vehicle expenses, and inventory would add complexity and cost.

Does it actually prepare and file your taxes or just organize documents? I'm wondering if I'd still need to pay someone after using it.

I'm a bit wary of AI tax tools. How does it handle state-specific LLC requirements? My state has some weird rules about professional services LLCs.

It doesn't file your taxes directly - it's more of a pre-filing organization and analysis tool. It organizes all your documents, identifies potential deductions, flags possible issues, and prepares everything so when you go to a preparer or use tax software, you've already done the hard part. This cuts down preparation time (and cost) significantly. It handles state-specific requirements really well. I'm in California with their complicated rules, and the system flagged several state-specific deductions and requirements. It's updated regularly with tax code changes across different states, and it specifically asked about my LLC's structure and industry to give proper guidance.

Wait, how does this actually work? You pay someone to wait on hold for you? Seems fishy that this would be allowed.

This sounds like a scam. Why would anyone pay to talk to the IRS when you can just call them yourself? Sure the wait is long but it's free.

It's not someone waiting on hold for you - it's an automated system that navigates the IRS phone tree and holds your place in line. When an actual IRS agent picks up, the system calls you directly and connects you. It's completely legit and doesn't violate any rules since you're the one who actually speaks with the IRS. The value isn't just avoiding hold music - it's that you don't have to keep redialing for days when the IRS lines are busy or drop your call after waiting hours. You can go about your day, and the system notifies you when an agent is available. For business owners, time is literally money, and spending hours on hold isn't profitable.

Wow, $475 is so much more reasonable! Do you have any tips for finding someone good at that price point? Did you just Google local accountants or was it word of mouth? I'm definitely going to shop around this year.

I found my accountant through a local small business networking group in my area. Word of mouth referrals are gold for finding good accountants at reasonable rates. Check if there's a Chamber of Commerce small business group or even Facebook groups for local business owners in your area - then ask for recommendations. When interviewing potential accountants, ask specifically about their experience with pet service businesses or similar industries. Mine already had several dog walkers and pet sitters as clients, so she knew exactly which deductions to look for. Also ask about their communication style and availability throughout the year, not just at tax time.

I tried that route first and missed a bunch of deductions. Ended up hiring a pro who saved me way more than his fee. Software is fine if your business is super simple but it doesn't replace experience.