Do freelancers really need accountants?

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Tax season is upon us in the United States; and it’s never fun. (Hey GDB readers from around the world, help me out here: when is tax season – if any – in your country? Leave a comment!)

But today, I wanted to answer a question I hear all the time from freelance designers: “Do I really need an accountant?”

Can’t a competent freelance designer just do their own taxes?

Today, I’d like to take a stab at answering that question and then turn the mic over to you so you can share your experience and opinion with me.

I’ve never used an accountant

Here’s the deal:

I’m cheap.

I’ve been freelancing for a while now and I have never hired an accountant to do my taxes. Not one time.

But every April, I find myself sitting at my computer with some free or cheap tax assistance software with bloodshot eyes cursing at the screen because I can’t seem to figure it out.

Revenue and expenses? Piece of cake.

Assets, amortization, depreciation of company property? Not even close to cake.

Why I’m using an accountant this year

But this year is different. Last year, I had the highest growth in my design business, my wife and I bought a house,  and it was the first year in a long time when I worked a full-time job other than freelancing (remember, don’t hate).

So this year, I want to make sure I get it right. I want to make sure my finances are in order as much as possible.

Which means I’ve hired an accountant.

Worth the money?

I guess I’ll know after this year if it’s worth the money to hire an accountant. If you’re still trying to decide, keep this in mind:

Every minute that you spend working on your taxes is another minute you’re not working on your clients’ project. Working on taxes are not billable hours.

Each of you has to ask yourself if it’s worth the money, but as for me this year–I’m getting an accountant.

What are you doing this year?

Do you hire an accountant during tax season? Why or why not? Do you think it’s worth the money? Have you had any good or bad experiences? Leave a comment and let me know if I made a good decision!

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About Preston D Lee

Preston is a web designer, entrepreneur, and the founder of this blog. @prestondlee

Comments

  1. The saying goes: If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur. That can apply to clients that think hiring designers is a waste of time, or designers who try to do their own taxes. As a solo designer, there is so much more to think about in terms of shared utilities, property etc. between personal and business use. I have used an accountant for years, and the past few years I have been comparing their results with online tax software. I found that while the accountant cost more, my refund was higher. Conversely, I still got a refund through online software and it cost less, but the refund was much less as well. So it was more or less a wash. I say leave the accounting to the pros who are up on the ever-changing tax rules and ways to find deductions.

    • Preston D Lee says:

      I totally agree. Thanks for your input, Brian!

      • Adam Smith says:

        Ha ha, I need to borrow that phrase. The whole point of hiring an accountant is that they’re supposed to save you money in addition to covering their own fees, otherwise no one would ever use them, right?
        I’m going with SJD Accountancy when I make the move from freelancing on the side to full-time freelancing. They’re the biggest in the UK, and they’re already tee’d up to help me with expenses and such. Just got to get into position to make the jump now.

  2. Tax season in Poland – end of april. And we don’t like it :) Thanks fo another great article :)

  3. Even before I got my accounting degree, I did my own taxes. I started using turbotax around 12 or so years ago and have used it ever since. They have always done such a good job of walking you by the hand through the process and providing really easy to understand info on all the topics.

    That being said, I would strongly encourage all business owners to get at least some basic accounting training early on. If you have a small business development center in your community, they always have classes on the basics of business bookkeeping. Or, if you really want to know what you are doing, then taking a financial accounting 101 class at your local community college is a wise step. Even if you have professionals doing the work for you, YOU still need to know what is going on yourself.

    • Preston D Lee says:

      Michael,
      That’s a great point, for sure! I completely agree. There’s nothing worse than losing control of your money and turning your cash over to someone who doesn’t care about it. You’ve worked hard for your money so take good care of it.

  4. I’m based in Jamaica and I’ve been freelancing for a minute. And I’ve found it very useful to have an accountant. Fortunately, my accountant is a friend and shares the ins and outs of our tax system. He’s been a real asset to my small business. And as you rightfully said, time spent doing taxes could be used working on a clients project.

    If you can afford an accountant you should get one, preferably not a big firm where you are just another number, but someone who values their client.

    • Preston D Lee says:

      I agree, pxJunkie. Find someone who cares about you and your business and you’ll be much better off.

  5. I never used to use an accountant. Then I met my husband. And HE used an accountant. So he suggested I pay her a visit. She looked over the taxes I had filed. She did not find any errors. But she did find things I MISSED! Those omissions wound up costing me THOUSANDS over the years! The few hundred dollars I paid her to revise the past three years was well worth it (I’m in California, USA – we can revise up to three previous years). The amount of money I got back from the IRS was enough to put a hefty down payment on a new car. So yeah – the accountant’s fee is ABSOLUTELY worth it. And btw, I now use a CPA, all the better and not much different in cost.

    • Preston D Lee says:

      Wow, Kristine, that’s a really cool story! Now I’m even more excited about getting an accountant this year! Thanks for sharing!

  6. I’ve been spoiled my entire life – my dad was a financial consultant and CPA for multi-million dollar clients in California, so he did my tax return and provided unparalleled advice. Unfortunately, he passed away recently, so I don’t get the beloved only daughter discount – free.

    However, I’ve hired one of his business partners and longtime friends who specializes in business consulting. Really, that he does my taxes is almost a bonus. He knows my business and personal financial situation. He can customize his advice to my business and personal life. He’s devoted the last 40 years of his life to advising small businesses on how to succeed – the wealth of information, experience, and wisdom he imparts upon me is totally worth the bill.

    While it’s more expensive to hire an accountant/business consultant rather than walking into H&R Block (or the like), the education I get is priceless.

    • Preston D Lee says:

      April, sorry again about your dad, but great story here. I totally agree with what you’ve said. Could you share a nugget of wisdom from your financial mentor?

      • Sure thing, Preston. Here are a couple:

        1) Make up a mileage chart and record all the miles you drive for business or business-related ventures. Save all of your gas receipts, too.

        2) Keep a time sheet of what you do for your business every day. Analyze it each month to see how well you’re doing in regards to everything from marketing time to education hours to design time to administration (and free time, too!).

  7. I decided to hire one for the first time this year instead, much for the same reason as you. Because of that, all my taxes are already taken care of, I can be reasonably sure they did a good job with them (probably better than me anyway).

    I weighed how much time I typically spend on my taxes and how much they estimated the price to be, and while it was more expensive for me to hire someone to do them, the extra cost was worth it in my opinion.

  8. Haha I like the way it started….’…piece of cake…not even close to cake…’.

    We actually take turns to manage our own projects, timelines and budgets, at the end of each one, we tally everything into a little PNL document and we reserve a few hours each day for about 2 weeks on this when tax submission is near and work out the final numbers. We find this works better for us and saves the exhaustion if it were done in one huge sweep!

  9. We usually plan and start the tax submission works one month prior. And each day we used to work as per the plan. Thus saves the expense for accountants.

  10. I guess if you can and have the time you should save money and do your own administration, if not, don’t be cheap and hire a professional you don’t want to screw up your paperwork ever!

  11. I’ve always had an accountant – it takes the hassle away and it’s one less job for you to do at the end of the year.

    I recently moved my accounts to Xero (or rather my accountant did!), and its one of the best decisions I made. Creating invoices and reconciling payments / expenses is so easy. Before I was generating invoices with Word, but this makes it so much quicker.

  12. Hey guys,

    Just reading all these posts has made me come to the conclusion that I do need a consultant and/or accountant. I definitely will be getting one this year!

    I’ve worked as a designer for other companies but now I’m just about to start freelancing, therefore am doing all the research on the financial and legal stuff relating to it (I’m not so clued-up in that department) so reading this has helped me get an insight and better understanding of it. Thanks guys!

    By the way, the end of financial year in Australia is June 30.

  13. This has been a real eye opener. I’m filing my taxes for the first time as a freelance designer. I’m cheap but I don’t want to miss anything. Does anyone know of any accountants in Chicago that can help, let me know?

    Thanks!

  14. Very interesting stuff. I found another good take on this at http://www.creativeagencyfreelancing.com/resources/using-and-finding-accountancy-software

  15. tax season in canada is in Feb.

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  1. […] Do freelancers really need accountants? | Graphic Design BlenderBy Preston D Leeaccountant designer graphic design blender. Tax season is upon us in the United States; and it's never fun. (Hey GDB readers from around the world, help me out here: when is tax season – if any – in your country? Leave a comment!) …Graphic Design Blender […]

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