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Not having a good tax preparer can cost you thousands every year.
Taxbot is dedicated to simplifying complicated tax issues for business owners. But tax reduction is a team sport when it comes to your choice of a tax preparer. You need someone on your team that you can trust. The first person you should seek to have on your team is a good tax accountant or advisor.
One of the most common questions we get asked by our thousands of clients is “How do I find a good tax accountant to file my taxes?” Sadly, of the thousands of tax accountants and advisors available, only a fraction understand the complex world of the small business owner and the strategies they have at their disposal.
The truth is, many accountants are great at filling standard taxes and others may specialize in corporate taxes. They are probably even good at what they do. Most of them however, do not focus on self-employed individuals, like you!
Another thing to consider is that some accountants might just be timid! There is a big difference in an timid accountant that “files” your tax return and one who aggressively looks for legitimate deductions for you.
Accordingly, here are some questions that you can ask in order to see if an accountant is the right fit for your business. Here are some suggestions:
1 – What designations or credentials do you have?
Look for “enrolled agents” (people who pass a special IRS examination), certified public accountants, ex-IRS agents, or attorneys, etc. We like preparers with legal backgrounds, because they tend to be more aggressive but also know the law.
2 – Are you in practice full time?
Hopefully the answer will be yes. If you are in business you need someone who takes pride in what they do and stays current with all the updates to tax law. A part time person just can’t do this. You don’t want a rookie experimenting on you! Look for someone with at least 3-5 years experience with business returns.
3 – What percentage of returns do you do for businesses vs personal filings?
This is a big clue. Most of your franchise locations, like HR Block, do mostly personal returns. Business taxes are much more complicated and require someone with a lot more experience. If they personally do less than 20% of their returns as business returns you’re better off finding someone else.
4 – What are your fees and do you have a written fee schedule?
Cheaper is not necessarily better. You may get what you pay for! In fact, we believe you should pay your professionals well. A well paid tax accountant (assuming they are qualified on all the other questions) will pay dividends for years into the future.
5 – Are you personally conservative, aggressive, or somewhere in the middle?
Find someone who matches your personality. Personally, we like someone who is aggressive on strategy but very conservative on documentation. This means someone who is looking for every possible deduction you can take but insists that you have the correct back-up records and documentation to prove it.
6 – What review process do you use in order to ensure a quality product?
Accountants are humans and sometimes make mistakes. A good accountant will always have someone else that’s well qualified review their work.
7 – Do you specialize in business taxes and are you available year-round for tax questions?
They should say yes! If they don’t then its time to move on. Taxes are too important a part of your life to not have a professional who specializes. You may have questions during the year so it would be nice to go to someone familiar with your tax records.
8 – What is your attitude toward tax audits?
Unfortunately, many tax preparers recommend not taking legitimate tax breaks at all if it could possibly trigger an audit. These accountants are a “hazard to your wealth”. Audits happen. As long as you are ready for them with good documentation and you haven’t done anything wrong then you should be taking ALL of the legal deductions you deserve.
9 – How do you treat deduction gray areas?
The best advisors will tell you that the area is gray and give you your options. Stay away from advisors who say, “The area is not clear, so don’t take the deduction.” You should be the one to decide your appetite for risk. The key is having your complete documentation of the event in question.
10 – Do you offer pre-year-end tax planning as part of your tax service? If so, is there an extra fee for this?
Don’t shy away if there is an extra fee. It could be worth huge money to you. Chances are, the pre-season tax planning and strategy will easily save you much more than the fee. Don’t wait until tax time to find a tax professional, smart tax management is a year around effort.
Conclusion: These questions may not be all-inclusive. However, they will certainly “separate the wheat from the chaff” and enable you to make much better decisions as to whether an accountant is right for you! If you don’t know where to begin your search for a good strong business accountant maybe we can help. Contact Taxbot customer support at 855-482-9268, chat in the Taxbot app, or email firstname.lastname@example.org. We’ll put you in touch with someone who can help. We will not share your information with anyone.
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