Benefits of Outsourcing the ERTC Documentation Process

August 1, 2023
Dayes Law Firm

Filing taxes each year or each quarter can be a daunting task for many business owners. How do you know what exemptions and tax credits your business qualifies for?

Eligible employers can claim a tax credit for qualified wages paid to employees during the pandemic. If you’re worried about accuracy, then outsourcing ERTC documentation for your business taxes can be beneficial; work with a qualified lawyer to potentially make filing easier.

What Is the ERTC?

The ERTC is the Employee Retention Tax Credit, a refund available for eligible employers affected by shutdowns and declines in gross receipts during the pandemic. Restaurants automatically qualify for the ERTC, but many other businesses in affected industries also qualify. With the ERTC, you can reclaim a portion of taxes paid in 2020 and the first three quarters of 2021 based on qualifying wages paid.

Benefits of Outsourcing Your ERTC Accounting Processes

Outsourcing your employer taxes to a third-party accounting firm or service can offer several advantages over hiring an in-house accountant. Small- and medium-sized businesses (SMBs) often don’t need a full-time accountant to manage their finances. Even large firms may not require an accountant except around tax time.

If you’ve determined eligibility for the ERTC for your business, you might be able to take advantage of the benefits of outsourcing ERTC documentation and filing.

1. Tax Law Experience

Many third-party accounting and tax firms have years of experience with tax laws, deductions, exemptions, and tax credit refunds for business clients. Eligible employers seeking the ERTC can benefit from this experience by outsourcing rather than trying to hire an in-house tax professional.

By outsourcing to a tax firm with many business clients, it is much more likely that your tax professionals will have worked on ERTC claims for several clients and will be more familiar with the requirements and documentation than an accountant who hasn’t worked with as many business clients.

2. Compliance With Tax Processes and Documentation

Filing your employer taxes is often a more involved process than filing your personal taxes. Ensuring that your company is in compliance with all necessary documentation is essential to making sure that you don’t owe more in taxes or that you aren’t due a larger refund.

You may also need to file multiple tax forms for federal, state, and local business taxes. Besides just the federal ERTC, you must also complete the appropriate forms for any tax liability you have for your respective tax authorities. For example, Arizona has state income and corporate income taxes, as well as local sales taxes for cities and municipalities that vary between locations.

3. Fewer Costs and Penalties

Ensuring that your tax preparer has the appropriate knowledge and experience can help you pay the correct amount in taxes without needing to file an adjustment later to correct any mistakes. The IRS may also levy penalties against your business if you fail to pay your tax obligations in a timely manner.

4. Up-to-Date Knowledge of Tax Law Changes

Tax law changes frequently, and the ERTC is no exception. More recent clarifications have added employee tips to the qualified wages portion of the ERTC, as well as specific Safe Harbor exceptions for pandemic funding, including PPP loans, SVOG funds, and RRF grants.

Contact an Experienced ERTC Law Firm 

Outsourcing ERTC documentation offers several benefits for business owners claiming federal tax credits. For help understanding more about the ERTC and what it means for your company, contact our business tax firm, the Dayes Law Firm, in Phoenix, AZ. Call us today at 800-503-2000 or contact us online to schedule a consultation with a business tax attorney.