Does your business prepare and file its own taxes? While preparing and filing your own taxes may seem more logical than hiring out a professional to do it, it may be in your best interest to hire a tax preparation business consultant. As the tax code continues to expand and become even more complicated, business owners are having a hard time understanding new tax laws. That is, if they even have time to read the lengthy tax code.
While the cost of hiring a tax preparation business consultant may seem expensive at first glance, it will actually save your company a substantial amount of time, money, and frustration in the long run. A professional consultant will know the tax laws and regulations that apply to your business and be able to prepare an accurate return for your business. Choosing the right consultant, however, is essential.
The IRS has provided a lengthy list of requirements business owners should use when hiring a tax professional. For your convenience, we have compiled a tax preparation business consultant checklist to assist you in your search for the perfect tax consultant. Keep the following characteristics in mind as you review your tax preparation business consultant options:
- Is the consultant licensed? Licensed professionals are the only ones authorized to represent you before the IRS on tax matters (including audits), so make sure your tax preparation business consultant meets the proper licensing requirements. You can view these requirements here.
- Do they offer a free consultation? The initial consultation is essentially the “interview”, and it is just as important as hiring a new employee. Remember, you are legally liable for the information on your tax return, so you your tax preparation business consultant with care. Bring a copy of last year’s tax return to the consultation and discuss how your business situation has changed over the year. Clarify your needs during this consultation to see if the consultant can deliver upon your requests.
- How will they charge you for their services? Find out as much information as you can about the tax preparer’s fees before you begin your service with him or her. Some consultants will charge for the number of forms (also known as Schedules) filed while others will charge by the hour. Gaining an understanding of these fees beforehand is important so you aren’t blindsided by a high bill months down the road. One good way to gain an understanding of their charges and fees is to ask what they would have charged to complete last year’s tax return.
- Will the consultant be available a year from now? It’s important for businesses to be able to contact their tax preparation business consultant about any questions they have regarding their tax return, whether that be months or years later. Make sure your consultant has a stable history before you hire them.
- Does the consultant have any complaints filed with the Better Business Bureau? Make sure that you have thoroughly investigated his or her credentials and find out if they have any complaints filed with the Better Business Bureau. If they do have complaints, begin looking for other options.
- Does the consultant ask for receipts / more information to determine whether expenses qualify for deductions? A reputable tax preparation business consultant will ask for any and all receipts to determine what expenses qualify for deductions, and they will ask multiple questions to gain a better understanding of your business expenses.
- Will your tax return’s preparation be outsourced? This could lead to significant security risks, particularly if your personal information is being transmitted via the Internet. Find out if the consultant will be preparing your tax return his or herself. If not, you may want to look elsewhere. After all, you are paying for the consultant – not the outsourcing service.
- What is the consultant’s experience with IRS audit? Ask about their history with the IRS and whether or not they would represent you should your tax return be audited.
- Do they have a reimbursement policy in case you end up owing back taxes on a return they prepared? Many reputable tax preparation business consultants have insurance for this particular case.
A tax preparation business consultant is a smart investment if you choose the right person. By using the above tax preparation business consultant checklist, you will be prepared to ask the right questions and – ultimately – hire the right consultant for your business.
If you are looking for a tax preparation consultant, contact us today. Our team consists of Certified Public Accountants (CPAs) and Business Advisors to help your business navigate the complicated tax laws and legislation.