Three Key Questions To Ask When You Select a Tax Accountant

Are you satisfied with the taxes you’re paying? Confident you’re taking every possible deduction on your tax return?

If your answer is ‘no’, it may be time to select a new tax preparer. Here’s 3 key questions to ask in choosing your next accountant.

1. What kinds of clients do you work with?
You’ll benefit most from a tax pro who has worked with other families or businesses like yours. Someone who knows all the special deductions and credits available for your specific situation. Don’t assume this is the case!

The best tax accountants are specialists; they focus on a specific taxpayer niche. For example, some focus on tax rules for clergy, others on the senior market, while still others specialize on a specific industry, like restaurants, or realtors (that’s mine). Each of these taxpayer groups have special tax rules specific to their niche, and unique deductions, credits and strategies they can take advantage of.

At the end of the day, you want an accountant who knows the ins and outs of the tax code as it relates to your financial situation.

2. Are you available year round?
Many tax firms shut their doors after April 15th, only to reopen for the next ‘tax season’ the following January 15th. But what if you receive an IRS letter in June? You don’t want to wait until next year before your tax preparer can help you address your IRS tax matter.

More importantly, if you’re like most of my tax clients, you want pro-active tax advice. It doesn’t matter how good your CPA is with a stack of receipts on April 15th; real tax saving comes from planning and strategies that come from touch points throughout the year. You can’t get that from a CPA who’s only open for a few months, or who only focuses on taxes 3 months of the year but then switches to audits or payroll the other 9 months.

Finally, one of the biggest mistakes small business owners make is treating their accounting and taxes as if it’s a once-a-year event. You miss a lot of deductions and pay too much tax when your record-keeping has holes in it. Accurate and up to date bookkeeping reduces your taxes and gives you the information you need to make wise business decisions throughout the year. Most small business tax professionals also provide year-round business bookkeeping services

3. How do you bill for your services?
Though price is important to anyone, you shouldn’t hire an accountant based merely on what they charge. A more important question than “What do you charge?” is “How do you charge for your services?”.

You will discover that some accountants charge by the hour, others bill a flat rate, and still others charge by the tax form. Each method gives you a clue about the type of firm you’re dealing with, and the level of attention your return will receive. Those who bill by the hour will take a more hands-on approach, which enhances accuracy, but may also increase their overall fee. On the other hand, those who charge a flat rate may be less expensive, but also less detail-oriented as they prepare your return, focusing instead on the easier returns they can wrap up quickly, and then moving on to the next one. This can lengthen the turn-around time for completion of your return.

Regardless of their billing approach, be sure to get the accountant’s final estimate of his or her overall fee. Provide a copy of your previous year’s tax returns so the accountant can familiarize himself with your business before giving a quote.

ANCHOR ON THIS: The quality of the answers you get is directly related to the quality of the questions you ask. Asking these three key questions can quickly help you determine whether you’ve found a tax professional you can trust.

Posted in Income Tax, Small Business and tagged , , .

One Comment

  1. I loved when you talked about the importance of asking a tax accountant about their types of clients. It makes sense that asking about this can help you know if they work with people that have circumstances like yours or not. I would want to find someone that can help me understand the process and educate me on how to get the most from it.

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