Tax preparation and filing isn't easy at the best of times, but with business ownership comes new responsibilities.
Whatever your business type, you may decide that you can benefit from the services of a tax professional to help you get your ducks in a row or help you complete your return.
Not getting the right help can expose you to potential tax return errors, which can lead to costly penalties and time lost down the line. And because each business is different it’s important to get the right help based on your needs.
When selecting a tax professional, here are four areas you need to cover:
What are Your Options?
All tax professionals specialize and come in many forms, including tax franchises, tax attorneys, and certified public accountants (CPAs are licensed by the state and are suited to complex tax issues) and enrolled agents (an enrolled agent has passed an IRS test plus an IRS background check, they focus exclusively on tax accounting).
As you build a shortlist of potential candidates, ask around for referrals and focus on identifying tax professionals who have experience working with businesses of a similar size and type to yours? Is the professional familiar with your particular line of business?
What Type of Services do they Offer?
Some tax professionals (particularly the walk-in franchise tax preparation services) are great at helping you get your taxes done quickly. But if you need long term tax planning help you may want to consult a CPA or enrolled agent – they actually don’t charge a whole lot more than the franchise tax experts and can specifically help businesses understand how to realize tax efficiencies.
Other things to look out for are accuracy guarantees (many offer this as a protection against potential penalties in the event of an audit), willingness to amend the return in the event of errors, and assist you in any dealings with the IRS.
Don’t be afraid to ask questions that help you get a better picture of your needs – your situation may be less or more complex than you are aware, and an initial consultation can help you better gauge your needs (many tax preparation offices will do this for free in the hope of winning your business). Bring your records, last year’s return, and any other documentation that gives a quick snapshot of your circumstances.
How Will they Bill You?
Call around a few local tax offices to scope out the pricing and billing policies. Most fees depend on the complexity of your tax return and you can expect to pay either by the hour, or a flat fee. Ask lots of questions about what is included in these rates and any potential extra fees you may incur. Are there any ways you can keep your fees to a minimum by doing as much preparation and good record-keeping yourself in advance.
If the IRS queries your return or audits you, will the tax professional assist you? Are they authorized to represent you to the IRS?
Ask for References
In the rush to get your return done, don’t disregard the importance of references. Ask your shortlist of tax professional candidates for a list of clients who are close to your business profile, and follow up with these before you make your decision.
Related Resources
- Business.gov Small Business Tax Center
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