Some business owners handle their taxes on their own. In many cases, it’s to save money—a natural mode for entrepreneurs—associated with the cost of hiring an in-house or freelance accountant or paying a tax preparation firm. But doing it themselves easily ends up costing more, especially over the course of a few years. Most small business operators don’t have the expertise to minimize their tax liability. That’s why we’d like to offer some tips for choosing a tax preparer for your business taxes.
A tax prep professional delivers many benefits when filing your taxes and beyond. Of course, they ensure you take advantage of all possible business deductions, including the common and uncommon. They also make sure you’re fully compliant with all relevant tax laws, keeping you clear of fines, fees, and other potential complications. And a well-qualified tax professional also serves as an adviser who helps you with things like better business financial risk management and avoiding typical business financial planning mistakes.
In other words, using a professional will actually save you money and spare you some headaches. So, if you still need to find one, here are some pointers for choosing a tax preparer for your business taxes.
How to Pick a Tax Prep Professional for Business Taxes
- Avoid waiting until the last minute to choose a tax preparer; many of the best aren’t available as the tax filing deadline approaches, plus you won’t have time to carefully vet your choices.
- Ask other local business owners if they can recommend a tax preparer they’ve used for their own company. Use these names as a starting point, but still do your own research.
- Google the firm, CPA, and attorneys you’re considering and read reviews by their clients.
- Confirm that the agent has an IRS-issued PTIN (preparer tax identification number), which is required for them to be eligible to file taxes on your behalf.
- Review their experience and credentials, including membership in trade organizations and participation in continuing education.
- Seek out a tax professional with extensive business tax experience—not mostly experience preparing personal taxes. However, you’ll probably want someone who can prepare and file your personal tax return, too.
- Most reputable tax preparers offer a free consultation, or at least a reasonably priced consult, the cost of which can be applied toward future fees for work performed.
- Inquire up front about fee structuring and get an estimate in writing. Don’t hesitate to ask for a detailed pricing explanation, and make sure you understand and feel good about the answers you get. A reputable business tax preparer is transparent about how and what they charge.
- Ask any other questions you have. You want to work with a professional who takes the time to answer your questions and address your concerns—and who explains things clearly.
- When choosing a tax preparer for your business taxes, find out who on staff performs the work of filling out the forms. When applicable, make sure a supervisor reviews the work of employees before your return is filed.
- Don’t use a tax preparer who outsources any of the work involved in preparing your return.
- Don’t use a tax preparer that doesn’t ask for relevant records of your income and expenses.
- Reconsider anyone who doesn’t e-file. Tax prep professionals who file at least 10 returns are required to e-file. So, anyone who doesn’t e-file doesn’t handle many returns. Note, however, that if you’re knowingly using an attorney who has a PTIN but doesn’t primarily do tax work, this isn’t necessarily a reason to be concerned. Still, it’s wise to opt for a professional with extensive experience preparing business tax returns.
- Make sure you’ll be given the chance to review your return and ask questions before it’s filed.
- Make sure you’ll be given a complete copy of your return as well, and that all your original documents will be given back to you.
- Confirm that your business tax preparer offers assistance in the event of an audit, and that they have experience with this.
- Confirm also that your preparer is available all year long, not only during tax season.
