Frequently Asked Questions About Accountants for Self-Employed Professionals

Why do self-employed professionals need an accountant?

If you are self-employed — a graphic designer, consultant, technician, translator, or any other profession operating as a self-employed business — you are not alone in your questions. Every week we hear them again: "Am I required to keep books?", "How much does an annual report cost?", "What is the difference between an exempt practitioner and a licensed practitioner?"

These things are not always clear, and that is fine. Issues of taxation, reporting, and financial statements can seem complicated, but they are actually built on a few simple principles that every self-employed professional should understand.

This guide brings together the questions we hear most frequently from self-employed professionals in Petah Tikva, Ramat Gan, and the central region. Each answer is written in simple language, without unnecessary jargon, and with real-world examples that will help you understand how it works in practice.

In short — if you are self-employed and worried that you are missing something regarding taxation and reporting, this guide is for you.

What is an exempt practitioner and what is a licensed practitioner?

This is the first question every self-employed professional should ask themselves. These two terms determine many things — how much tax you will pay, which reports you need to file, and what deductions you can make.

An exempt practitioner is a self-employed professional whose annual income is below a certain threshold. Typically, an exempt practitioner is not required to file an annual report to the tax authorities, but they are required to keep simple books and maintain invoices. If you are a self-employed professional who has just started, or if your income is relatively low, you are likely an exempt practitioner.

A licensed practitioner is a self-employed professional who has exceeded the exempt practitioner threshold. Here the requirements are stricter — you must file an annual report, maintain complete books, and often also register for VAT. A licensed practitioner pays income tax on their profit, similar to an employee who has tax withheld from their salary.

The important point: the determination between these two categories is not something you choose — it is determined based on actual income. If you are an exempt practitioner but your income increased in a particular year, you may become a licensed practitioner, and this affects all your reporting.

What you need to know about annual reports and advance tax payments

If you are a licensed practitioner, you are required to file an annual report to the tax authorities. This is not optional — it is a legal obligation. The report documents all your income and expenses during the calendar year and serves as the basis for calculating income tax and national insurance contributions.

What is important to understand: the annual report is not something filed in December or January. In fact, there are usually different deadlines depending on the type of activity you engage in. Professionals in certain fields must file by a certain date in the summer, while others can file by the end of the year. If you miss the deadline, it can result in a substantial fine.

Additionally, most licensed practitioners make advance tax payments during the year. This means you do not pay all the tax at once at the end of the year, but rather in monthly or periodic installments. These advance payments are calculated based on your income from the previous year, but they can change if your income has changed.

A good annual report should be accurate, organized, and clear. If you are handling reporting yourself, you need to keep every invoice, every expense, and every receipt. If you are using the services of an accountant, they will help you organize all of this and ensure that the report is correct.

Common mistakes self-employed professionals make — and how to avoid them

In our work with self-employed professionals, we see the same mistakes repeatedly. They are not always dangerous, but they can lead to reporting problems, fines, or even tax authority audits.

• Disorganized record-keeping of invoices and receipts. Most self-employed professionals put all the paperwork in one folder. When it comes time to prepare an annual report, it is chaos. The solution: simple organization — invoices you issued to yourself, invoices received from clients, receipts for expenses. Even a simple spreadsheet helps.
• Deductions that are not recognized. Self-employed professionals sometimes try to deduct expenses that are not related to the business. The tax authorities do not accept this. It is important to know: a recognized expense is an expense that has a direct connection to your business activity.
• Late filing of annual reports. This happens too often. Self-employed professionals worry about the process, prefer not to think about it, and suddenly a fine arrives. If you are procrastinating — it is best to contact an accountant early, as they can help you obtain a deadline extension or arrange everything quickly.
• Misunderstanding the difference between income and profit. Income is the money that comes in. Profit is what remains after you subtract expenses. This affects your income tax and national insurance contributions, so it is important to distinguish between them.
• Double deduction of expenses. If you pay an accountant or bookkeeper, do not try to deduct that same expense again on your annual report. This seems like an obvious thing, but it happens.

When Should You Consult an Accountant?

This is a question we hear often. "Do I really need an accountant? Or can I manage on my own?"

The answer is: it depends. If you are a tax-exempt business owner with low income and very simple operations, you may be able to manage yourself, provided you are organized and keep all documents. However, generally, it's advisable to consult an accountant in these situations:

• You are a licensed business owner and need to file an annual report.
• Your income has increased significantly and you are unsure whether you are still tax-exempt or already licensed.
• You are investing in your business (purchasing equipment, furniture, etc.) and need to understand how to treat these expenses.
• You work with foreign clients or receive foreign income — this complicates reporting.
• You recently opened a business and are concerned that something may be wrong with your report.
• You are interested in tax planning — for example, how to make smart deductions or how to legally reduce your taxes.

In short: if you have any doubt, it's worth consulting. An initial consultation meeting can help you determine whether you need ongoing assistance or just once a year.

Self-Employed Professionals in Petah Tikva, Ramat Gan and the Center — What Makes Our Guidance Special

Ben-Or Cook's office has been working with self-employed professionals for years, and we know what bothers you. Not bothers — confuses. You are busy with your work, not accounting, and suddenly you need to understand all these terms.

That's why we work differently. When you come to us, we don't start with tax tables. We listen to you. How does your business work? What is your income in recent months? Are there expenses you are concerned won't be recognized? What are your dreams for next year?

After that, we build a plan that suits you — not a plan that suits everyone. If you need monthly reports to understand your cash flow, we do that. If you prefer annual, that's fine. If you want us to think about taxes intelligently, we help with that.

And our service is digital. You don't need to come to the office (though you are welcome). You can send documents, ask questions, receive updates — all through phone, email, or a digital platform. It's easier, faster, and more suited to today's world.