Do you think one accountant is just as good as another accountant because they’ve all taken the same exams? The reality is that accountants vary greatly, and when looking for the best tax accounting specialist for your business, you want to avoid picking the wrong one.
Although an accountant needs to understand the tax laws, your tax liability can change based on your current financial position and your strategy for the future. The best CPA is one that understands this. Here are four things to look at before hiring a tax accountant.
- Billing Style
Many tax accountants no longer bill by the hour. Instead, they charge a fixed fee based on the scope of the project. This billing method might not work in your favor if you allow the tax accountant to determine the value of the project.
Make sure that both of you agree on the details of the project and why it’s important. Discuss how long the work is expected to take and what the best possible outcome will be.
It’s illegal for a CPA to accept a percentage of your tax return as payment for their services. If a candidate for the job says My fee is 15% of whatever you get back from the IRS, do not hire them. If you go along with this, you will be colluding in an illegal activity.
CPAs can be put into two broad categories: technicians and strategists. The technician tends to apply the tax regulations in the same way to each client. Obviously, knowing the rules is important, but your situation is not identical to that of other business owners.
The tax rules need to be applied in ways that dovetail with your particular business strategy. Strategic tax planning looks beyond the current tax year and determines how changes today will affect the future.
- The Answers to Your Questions
Obviously, the first thing is to determine that the candidate is a qualified CPA. Here are some more questions to ask:
- What tax-preparation software do they use? If the answer is TurboTax, this tax accountant is not who you need. Although TurboTax is fine for the average person, you are a business owner who needs a program incorporating powerful tax planning features.
- How do they stay on top of changes in the tax laws? If they say Google, this isn’t the CPA for you.
- Do they keep up with their CPE (Continuing Professional Education)? To stay licensed, every CPA is required to maintain CPE credits.
Many people rely on your business. Your employees need you for income and your customers for the maintenance of your products or services. So choose your tax accountant with care because one bad year of tax planning can put your business in jeopardy.