Now that you’re clear on the difference between an accountant and a tax attorney, you might be ready to hire the right pro to help get (or keep) your small business finances on track. Forming a working relationship with a tax professional can keep you out of hot water with the IRS and take some of the stress off of tax time. In fact, adding a tax pro to your small biz entourage should be part of your business operating expense—consider it insurance you shouldn’t live without!
Choosing the right accountant
Here are some solid steps to take to find the best accountant for your business’s financial needs:
- Determine what tasks you need help with. Budgeting? Cash flow forecasting? Tax preparation?
- Ask for referrals from other business owners in your network.
- Talk to your local Chamber of Commerce for a list of member accountants.
- Shop around to find an accountant who can help with your exact needs.
- Look for an accountant with a history of dealing with your type of business (i.e. sole proprietorship, LLC, etc.).
- When interviewing accountants, ask exactly what duties they are able to perform based on their degree and licensure level. Educational levels for accountants include:
- Tax preparer certification: Some states allow a tax preparer certification, which trains individuals to prepare basic personal taxes. You may be most familiar with tax preparers from places like H&R Block and other kiosk tax-preparation services.
- Two-year accounting degree: Technical colleges often offer a two-year degree in general accounting. Graduates may hold a certification or associate’s degree in accounting.
- Four-year accounting degree: Accountants may choose to receive a bachelor’s degree from a four-year university.
- Certified Public Accountant: The CPA designation must be earned by passing a rigorous examination. CPAs also hold a license from their state of practice and are held to a high standard of practice and accounting knowledge.
- Ask about technology. Does the accountant use e-filing software or accounting software that can help you track and organize expenses? Do they offer instruction on using compatible software that you can share, like GoDaddy Online Bookkeeping?
- Find out if the accountant will help with both personal and business financial advice if you need it.
Here are a few online resources that also can help you find the right accountant:
- National Association of Tax Professionals (NATP): Help for finding qualified tax preparers, nationwide
- CPA Directory: Lists Certified Public Accountants nationwide
If you feel your business tax situation is above what an accountant can tackle, the next step is to find a tax attorney. Tax attorneys are generally more expensive to hire; however, first meetings to discuss your situation may be free. And ultimately, if you’re in a bind with the IRS, the cost to hire a tax attorney could end up saving you a bundle of cash in the long run.
Choosing a tax attorney
If you have a complicated business structure, employees on payroll or have delinquent tax returns or owe back personal or business taxes, you may want to establish a relationship with a tax attorney.
Before you decide:
- Ask for referrals from trusted business owners in your network.
- Have a face-to-face meeting with a qualified tax attorney to discuss your needs.
- Ask for their professional references.
- Ask how much experience the attorney has with a situation like yours.
- Ask about the attorney’s continuing education practices. How up-to-date on tax laws is he/she?
- Ask how fees are managed and collected.
- Shop around. Interview more than one tax attorney.
With a qualified accountant and/or tax attorney in your arsenal of valuable small business resources, you’ll be well on your way to more sound financial footing. And you’re sure to sleep better at night.
As a small business owner, how did you find your accountant or tax attorney?