Don't Have a Tax Pro Yet? Time to Get Moving!
If you haven't hired a tax professional for your new business, we outline strategies to get you started.
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For new entrepreneurs, tax time can be a stressful one. Thankfully, you can minimize that stress by finding a knowledgeable, trustworthy tax professional. A great expert will not only answer your questions, but be a true advisor, helping to anticipate what might be around the corner. We sort out the questions you need to ask to help you find the right fit.
When should I start looking? Yesterday! If you haven't nailed down an accountant or tax professional to help you with your filing, you should do so as soon as possible. Accountants are on the cusp of Busy Season and that means their dance cards are filling up—quickly.
What should I look for? The spectrum of tax professional capabilities varies widely, and includes Certified Public Accountants, accredited tax accountants and tax attorneys. CPAs have training in managing a business' financial records, but may or may not have experience with filing taxes. Accredited tax preparers and accredited tax accountants pass a special taxation exam and some specialize in business returns. Tax attorneys often are specialists in IRS tax code and are admitted to the state bar.
These professionals have different backgrounds and strengths so ask your lawyer what works best for your business. Your lawyer can make suggestions based on how your company is formed, your jurisdiction and predict what you might need. Besides training, you'll want a tax professional who aligns with how you run your business. For instance, those who use cloud-based accounting software might want an accountant who's comfortable with digital tools. If you value face-to-face meetings, make sure you find a tax professional who can make the time.
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What about cost? Of course, cost can be crucial. Reach out to a few tax professionals to get a sense for the services and the market. Get a sense for their rates, what they expect your filing to require, an estimate of how long it will take, and when their fee will be due. Of course, a tax professional can be one of your most trusted allies. If there's one area in which you shouldn't tighten the purse strings, it's tax prep. Pay good money for it.
How do I vet them? Ask about training. How do they keep up with constant changes in tax law? You should also ask about deadlines. If they can rattle off the filing deadlines that apply to your business right off the top of their head, that's a good sign.
You might also ask what types of clients they typically handle, if they handle more tax filings for individuals or businesses and what types of businesses they've helped. It doesn't hurt to ask if they've worked with new businesses like your own, since you might need some hand holding.
Find out if the person with whom you're interviewing will be handling your return. If it's a junior employee, ask about that person's training and experience level as well.
You should also know what happens after tax season – is your information stored in some way and if so, for how long? What happens if there's an audit?
What do I do when I've found the right candidate? Ask for references and get calling. Ask those businesses about their experience, if there were any hiccups, what it was like to work with this individual and what they wish they'd known that didn't. You want to find an advisor who will be there for you in the long-term so it's worth a few extra questions to ensure the right fit.