How-To Articles

How to Hire a Tax Professional

Hiring the right tax professional will do wonders for the financial side of your business. By finding a good tax pro and building a relationship with him or her, you'll be able to seek assistance in many different ways throughout the year. Tax professionals will be able to help you make key decisions and give you advice. You can also have a tax pro prepare your taxes altogether, or you can ask him or her to simply review them. During a review a tax pro can point out deductions you may have missed and highlight red flags that could potentially get you in trouble. A good tax pro will also be able to represent you in front of the IRS should it ever come to that.

Tax professionals come in three different forms.

1. First you have enrolled agents (EAs), who are licensed by the IRS. They are the least expensive of the three and typically offer bookkeeping or accounting services.


2. Certified public accountants (CPAs) are licensed and regulated by the states they operate in. They perform more complex accounting and business-related tax preparation work.


3. The final form of tax pro is a tax attorney. Tax attorneys are lawyer's with special tax law degrees or tax specialization certification from the state bar association. Tax attorney's are the most expensive, but they can be invaluable if your tax issues are dire or complex.

There are a lot of people out there who claim to be tax experts. Make sure your tax pro fits one of these three criteria to get the best representation.

You can start looking for qualified tax pros in a number of different ways. The two best ways, however, are through personal referral or referral by a professional industry association or organization. Friends, family and business associates will be able to give you their own recommendations, while local bar associations or CPA societies will assist you in finding competent professionals.

Once you have the field narrowed down to a few prospects, interview them to find out if they're what you're looking for and what your business needs. Find out what kind of credentials they have. Ask if there is an area or type of client in which they specialize. Make sure you know exactly who you'll be interacting with and how much time they have to dedicate to you. Before you make your final decision, be sure to thoroughly discuss fees. Tax pros may bill by the hour, the form, the overall return or some other form of billing. Be clear on exactly what you'll be paying for.

Tax professionals are important members of your business, so make sure you take your time to find the one that is right for you. The best time to start searching is in the summer or fall, when things are less hectic. January to May is considered tax season, so a good tax pro may not have time to sit down for a discussion with you.