Licensed Tax Professionals & Small Business, Part II: How to Choose a Tax Filer for Your Small Business - Erin Armstrong

Erin Armstrong - Business Coach - Virtual CFO - 1934 Equitable Assurance Co - NMAH - P. A. Juley Son Collection

 (Part II of a II Part Series on Professional Tax Filers and Small Businesses)

Hello again! Last post, we talked about the advantages of using a CPA or EA for your business tax filing.

Now comes the hard part: how do you choose who to hire?!

Here are my tips for how to choose the right tax filer for your business:

Try to Get Personal Recommendations

Personal referrals are one of the best ways to find a good CPA or EA. Mostly because you want to make sure that you will be able to have a good working relationship with them.

If you hear from other business owners that a particular tax filer is really professional, easy to work with, and answers questions quickly, you should definitely add that tax filer to your list of candidates!

Find a Tax Filer who Works with Your Industry

Whether your business is real estate, construction, fashion industry, entertainment, etc., it is helpful to find a tax filer who is familiar with how your industry works. This will usually save you money at tax time, because this CPA or EA will be more familiar with how exactly your business works.

However, it’s not essential to find a tax filer who specializes in your industry—theoretically a good tax filer should take the time to learn about how tax law applies to your business—but it can be a big help.

Check Certifications

As a small business owner, you need to be working with a Certified Public Accountant (CPA) or an Enrolled Agent (EA) to file your taxes.

Make sure that whoever you are considering working with is certified by the state (CPA’s) or by the federal government (EA’s).

Above all, if someone calls him or herself an accountant as their sole professional credential, be cautious, because this term, in and of itself, is pretty much meaningless. There is no official certification for an “accountant,” and there are many people who call themselves “accountants” with no real training.

Erin Armstrong - Business Coach - Virtual CFO - Optin - Small Business Tax Deductions

Discover who Actually does the Accounting

When you hire a CPA or EA through an accounting firm, chances are that the person you talk to isn’t the one who is actually doing the work on your account. (In truth, if you hire a solo CPA or EA, there’s a possibility they’re passing the work on your account to someone else too).

Accounting firms usually have their top partners who talk with the clients, and then the behind-the-scenes accountants that are crunching the numbers, but clients rarely have access to.

Side note: if you use an accounting firm to handle your bookkeeping or month-to-month reconciling, realize that your accountant will not be working on this task themselves. Accountants regularly hire bookkeepers –and sometimes even outsource your books without running it by you—to bookkeeping firms.

As a client, it can be really frustrating when your accountant can’t answer your questions in a timely way because he or she hasn’t been doing the work in your account.

Know how the Services will be Billed

Some tax filers charge by the hour, and others will bill a flat rate for particular services. Before you hire your tax filer, make sure you know which way you will be paying—otherwise, it could be an unpleasant surprise!

Also, make sure that your tax filer bills all bookkeeping separately from any other services (such as tax planning, tax filing, etc.). This way, you can truly understand what you’re paying for—especially if you need to make changes to how you keep your books down the road.

Over to you:

Do you have any other tips for choosing a great accountant? Please share them below! ☺

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