Five Things to Keep in Mind When Choosing a Tax Preparer For Your Business

Five Things to Keep in Mind When Choosing a Tax Preparer For Your Business

Choose your tax preparer wisely! Five tips for informed decisions and top-notch service for your business.

By Austen Legler ・ 6 min read
Tax and Credits

No matter how quick with a calculator or how savvy you may be with TurboTax, Taxes can be a lot of work, and if you're a small business, there are just too many loopholes and write offs out there to know how to capitalize on every dollar.

The U.S. Tax codes are a winding road with many snares and traps if you don't know what you're looking for, which is why working with tax professionals is critical for success. But it's also important to acknowledge that being diligent about finding the best tax pros is the difference maker.

While, sure, choosing Bob, The Tax Guy who's got a spot in your local strip mall, might seem like a good idea, does Bob know the constantly evolving laws that can change with every legislative session?

Finding the right tax person or company matters because it's a relationship. It may seem like just a business transaction, but you've got to remember that these people will be combing through your numbers to help you make the most sense out of your books, whether they're sparkling clean or a total nightmare.

This is why we put together this list of six things a small business should remember when looking for the tax team who will help them from a box of receipts and into the promised land of knowing how to get the most money back.

If there are breaks out there, take them. Don't leave any money on the table. Because if you don't, a smarter business will.

1. Do your research

Remember Bob? It doesn't hurt to hit Google and see what his reviews are, check out the website, and figure out if Bob is even the guy you need for the job. There are two main types of folks who can help when it comes to taxes:

  • Enrolled Agent (EA) – they've worked for the IRS and should know the ins and outs of proper bookkeeping.
  • Certified Public Accountant (CPA) - a professional who knows business-related tax work and other accounting needs.

Finding a pro who does more than just basic tax prep and filing is best. If the IRS audits you, this person should be able to represent you, and sifting through anything wrong should be their job. After all, that's why you hired them.

Whomever you hire, make sure they know your industry. Experience matters, but experience with what you do matters more in this situation. They'll understand what unique tax credits (and liabilities) you may be subject to. This is especially true if you're self-employed. A good tax preparer will help you receive the credits you qualify for and can help you avoid extensions, amendments, or paying penalties and interest.

Essential Documents for R&D Tax Credit Claims: A Comprehensive Checklist

Download Now

2. Seriously, get specific

Because of the ever-changing tax codes, you need to work with someone who knows your industry. Laws change frequently. Many CPAs specialize in specific areas like estate planning issues and related compliance. In contrast, others may know the restaurant industry and what breaks there may be specific to buying garlic by the bucket.

Your CPA should be able to assist you with all your needs. Working with a tax professional is supposed to help business owners concentrate on their companies.

Here are a few situations why you should consider working with a tax pro rather than going rouge and doing it yourself:

  • You have employees or self-employed
  • You sold a property in 2021
  • You're retiring
  • You just started a business
  • You've got a complex business structure like an LLC or S-corps
  • You started a non-profit organization
  • You're a gig economy worker
  • You live in a state that doesn't have an income tax but is moving to one
  • You've worked across a few states
  • You're planning to buy or sell a business
  • You changed tax brackets (marriage, dependents, etc.)
  • You inherited property

No matter what tax preparer you talk to, make sure they have an active preparer tax identification number (PTIN) through the IRS. Also, check to see if they meet state requirements. Ask about their availability, their fees, and what records they'll need. Be thorough. These people have your money in their hands. Ask the hard questions, and don't be afraid to find out what you need to know.

3. Check their history

Check with the Better Business Bureau before hiring any potential tax preparers. Also, check with the appropriate state agency to ensure no disciplinary actions are taken against them. (Think the State Board of Accountancy, the State Bar Association.)

4. Talk to people you trust

Ask your associates, talk to your friends in the industry, do your due diligence, and follow the suggestions above, but it never hurts to get the scoop on someone your peers might love when handling their taxes. There might be a pro hiding in plain sight, and all you had to do was ask.

5. If it's too good to be true, it probably is

If a tax preparer is promising the moon and stars, that'll get you the most money or beat the competition. Chances are, this is a major red flag. What matters is they do a correct and honest job that will save you fewer potential headaches down the road should the IRS call for an audit. Don't fall for someone with slick advertising. It's about the quality of the work, not how much they promise to save your business.

If you’re looking for the right tax professional, we have some incredible folks in our network that can help! We’re dedicated to keeping our relationships strong and finding startups, and medium-sized businesses the best resources from a tax and accounting perspective.

Essential Documents for R&D Tax Credit Claims: A Comprehensive Checklist

Download Now

About the author

Austen Legler
Head of Partnerships

Austen Legler, an experienced marketer and sales professional, has worked with fortune 500 companies, startups, and more. As TaxTaker's Head of Partnerships, he leads the partnership strategy and is focused on building out TaxTaker's partner ecosystem.

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