Running your own business can start off like being a one-man band. In the early days, maybe it’s just you up there doing everything. It’s the business equivalent of a singer-songwriter paying their dues at an open mic night.
But as you start having some success, you play bigger and bigger venues, and it makes sense to start putting a band together. And when the band gets big enough, you need to get someone to keep track of T-shirt sales and make sure the promoter’s checks clear.
And let’s face it, when it comes to business, you are a rock star. But even rock stars have to pay taxes, and sometimes it’s a good idea to get a tax accountant.
So where do you find a good tax accountant? And what makes them good? Let’s take a look!
Why You Need a Tax Accountant
First things first. Your specialty is running a business. You’re passionate about it, and you’re really good at it. But the government wants its cut, so you have to pay your taxes. Do you have the time and energy to keep track of changes to the tax code? Do you have time to sift through your receipts and figure out which business expenses count as deductions and which ones don’t?
Probably not! You’re focused on serving your customers and disrupting the market. Your customers come to you because you’re an expert at providing the services they need. You solve the problems they need to have solved. So, it only makes sense to turn to an expert for help with your small-business taxes. That’s where an accountant comes in.
How to Find the Right Tax Accountant
Finding the right tax accountant is important to the success of your business, so you want to make sure you do it right. You need someone who not only knows the tax code, but also someone who can explain it to you. After all, it’s your business, and you’re ultimately responsible for whether you turn a healthy profit or end up in court fighting a tax lien. Here are some good ways to find a tax accountant:
1. Do your research.
When you search for a tax accountant online, check out their credentials. Look for a certified public accountant (CPA), a licensed tax attorney or an enrolled agent. When you interview prospective accountants, make sure they have a Preparer Tax Identification Number (PTIN). They’re going to be preparing your taxes, and the IRS requires their PTIN on your return.
2. Make sure they e-file.
The IRS requires tax preparers who expect to file 11 or more returns during any given calendar year to file those returns electronically. If your preparer doesn’t e-file, then it’s a good bet they aren’t doing as much tax preparation as you would expect for someone claiming to be a full-time tax accountant.
Finding the right tax accountant is important to the success of your business, so you want to make sure you do it right. You need someone who not only knows the tax code, but also someone who can explain it to you.
3. Get someone who will have your back.
If you get audited, you’ll want a tax professional in your corner. CPAs, tax attorneys with PTINs and enrolled agents can represent you in front of the IRS if there’s an audit, a payment or collection issue and during appeals. You’ll also want to make sure they’ll be available when it’s not tax season and answer the phone or see you in person if you need their advice or help—even after you file your return.
If you get audited, you’ll want a tax professional in your corner.
4. Ask these basic questions.
On top of all that, you’ll need to ask several basic questions to get an idea of their experience and how they do business.
- How long have you been in the tax business? You want someone who’s been in business for at least two years.
- Is there any particular tax issue you specialize in? If you know you’re going to be audited, make sure you get someone who has experience dealing with audits and the IRS.
- Does your office do all the work in-house or do you outsource some or all it? You want to know who you’ll be dealing with and make sure they’re communicating effectively.
- How long will it take? Ask for a ballpark estimate of how long it’ll take to prepare your taxes. If they have lots of other clients, find out where you are on the list.
- How much are your fees? Can I get that in writing? Get a written estimate of how much it’ll cost to prepare your returns.
- Am I paying too much, too little or just the right amount when I pay my quarterly taxes? You want to be like Goldilocks here and find the amount that’s just right. If you’re getting a huge refund or paying penalties at the end of the year, find out how much you should be paying each quarter. A good accountant can advise you.
How to Really Find a Great Tax Accountant
According to the National Small Business Association’s 2017 Small-Business Taxation Survey, the vast majority of small-business owners spent anywhere from 21 to 120 hours keeping books and working on taxes.1 That’s time you could spend improving your products, taking care of your customers, or developing employees.
Our small-business tax Endorsed Local Providers (ELPs) are here to let you be you so you can focus on growing your business and being an all-around rock star for your customers.