Businesses, whether small or large, have the major goal of money inflow. As the business expands and more money starts to flush in and out, there can be a need to have a person who can keep track of all your financial transactions. Eventually, there will be a need for a professional who can prepare and file your taxes. Finding a professional tax preparer can be a tremendous help and relieve stress if you have complicated taxes. If you are looking for a CPA for taxes near you, then we will help you out. We will discuss why and how to hire a CPA for taxes for your small business and what are factors to look at before hiring them.
Why Hire a CPA for Taxes?
The first question that arises is whether I should hire an accountant for my taxes. A skilled tax preparer will guarantee that you receive all of the credits you are eligible for and will assist you in avoiding the need to file an extension or amendment, as well as paying penalties and interest. The tax laws continuously change and can be different from one industry to another. So, it is very challenging to keep up with the deductions that can benefit your business and filings that can prevent your company from an IRS audit. If you don’t have an in-house CPA, then it’s time to hire a CPA for your taxes.
There are some instances where hiring a CPA is a very prudent investment. If you are behind on your taxes, a tax professional or an outsourced tax filing service can assist you.
There are choices of tax services available in the market. However, before you decide to hire any professional, you should carry out a rapid evaluation of your company’s financial health. You should have full financial accounts and records, including financial statements and a profit and loss report.
Pros and Cons of Hiring a Tax CPA
Having a tax accountant on your team reduces the liability of handling tax records. It ensures that the staff members can focus more on the core business. If you are still dwelling on the question, “Do I need a tax advisor?” here are some pros and cons to clear the picture.
- Save time.
- Available all around the year.
- Audit support.
- The expertise in managing taxes.
- Assistance in the financial structure.
- Hiring a CPA is an expensive option.
- Disclosure of personal information.
If you are looking to hire a tax accountant, then you can choose the AS Tax and Accounting. They are the leading firm for tax preparation and filing.
How to Select the Right Tax CPA for your Business?
If you prepare your taxes on your own, it will drain energy from you. It can be time-consuming and also requires technical knowledge. Thus, hiring a specialized tax accountant is becoming a popular practice.
Find Out the Potential Professionals
The very first thing any business should do is to create a list of expert CPAs. It can be done in many ways.
Ask for Referrals
There are many people around you who may have hired a CPA who specializes in taxes. You can ask your business partners, friends, and co-workers. However, it is the best tactic to take a referral from a person who belongs to your niche. CPAs and accountants typically concentrate on specific niches or specialties, such as small-business owners or high-net-worth people. An industry-specific CPA will be beneficial in the later stages of tax preparation.
Take the Leads from IRS Directory
If you want to find out certified CPA, then you should also check out the directory of PTIN holders. IRS maintains a record book of paid tax preparers. Preparer tax identification number is held by enrolled agents, C.P.A.s, and attorneys who have I.R.S.-recognized qualifications. The IRS also carryout workshops and education classes on taxation for these professionals. So, these professionals have a better understanding of taxes and ethics. The best tactic is to input your zip code so that you can find a CPA near your location.
CPAs Association and Bodies
C.P.A. organizations have online member directories. You can take references from them also. You can request C.P.A., who specializes in preparing taxes. Also, the National Association of Enrolled Agents (N.A.E.A.) keeps an Enrolled Agents directory. Find out the potential tax preparers from there.
IRS-Sponsored VITA or T.C.E Programs
If your annual income is less than $56,000 or you are 60 or older, you can consider the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (T.C.E.) programs. The IRS sponsors these initiatives, and the staff provides free services. Most VITA and T.C.E. sites will not display in your search results until about three weeks before they are set to open. If you look for a site outside of mid-January to April, you can have a hard time finding one near you.
Evaluate and Verify the Selected Prospective
After the hectic task of finding out the potential experts who can handle your taxes, the next step should be to verify their certificate claims, skills, and expertise.
Validate the Credentials
It is the most important step for every individual or business. However, names fetched from the IRS, NAEA, or any CPA association have legitimate CPA for taxes. But, if you have selected referrals, do check and verify their credentials. You can either go to cpaverify.org to check a C.P.A.’s credentials or your state’s board of accountancy’s website. If you have selected an E.A., verify it from EATax.org.
Check out the Online Reviews
It is the most trending way to check out the experts’ backgrounds. Examine your prospective C.P.A. or tax preparer’s website and social media profiles to see what they post online. Follow Yelp, Google, and Facebook for reviews. Make sure to analyze the reviews and website thoroughly.
Appointment – Time to Meet
After all the sorting and verification, it’s time to set up a meeting with the experts. Time is money. So, before the 2023 tax season, it is best to find out the right professional for your business.
Final Step – Interview Your Prospective CPA for Taxes
After the long process of verification of credentials, the last stage of the interview arrives. It is essential for every business to interview its experts and confirm the list of skills, workload, and expectations. Here are a few basic questions you should ask the potential experts.
How long have you been handling taxes for businesses?
The first thing is to confirm their experience in the industry. If you are a small business, then you can go with a tax accountant with little experience. But, if you have complex tax filing, it is the best practice to hire a more experienced professional.
Are they aware of modern tax laws and ethics?
It is another important question to verify the knowledge of the CPA. Are they capable of using tax software? It also helps you to get an understanding of ethics. Make sure they do not practice any illegal tax-saving filing activities.
Will they be available around the year?
Businesses that require the services of a tax accountant only once don’t have to emphasize this question. But if something comes up, be sure it’s their full-time expert with you. Some tax preparers set up shop during tax season, only to vanish by April 15. A seasonal tax preparer won’t be much assistance if something goes wrong after you submit your return or if you need help planning for next year. So, look for someone who is available all year.
Can you speak on my behalf before the IRS?
Since many CPAs are also enrolled agents, they can represent you and your company in hearings if you get into difficulties with the IRS. They will prepare your documents in accordance with the IRS guidelines and counter the IRS audit.
Who will be working on my tax return?
When you meet a representative of a tax accounting firm, then you should first confirm the name of the CPA who is going to handle your taxes. They can even push your work to less experienced professionals. It may lower your cost but may risk the quality of work. So, it is a good idea to be aware of who is actually executing the task.
How much are they going to charge for their services?
When you interview the CPA for your tax filing, ask them about how they are going to charge money for their services. It is perfectly acceptable to inquire about their rates and billing procedures. Whether they charge on an hourly basis or service basis, however, don’t expect them to provide exact charges in the first meeting. If you may provide your last year’s tax return, they may be able to give you an estimate of how much it will cost you to have your return prepared in the coming financial year.
Quick Tips Before Finalising Your CPA
If you are looking for a tax accountant, whether personal or for business, here are some pro tips which you should follow. It will smooth out the process and also assist you in avoiding any fraud.
Verify Preparer Tax Identification Number
Tax preparation by CPAs is subject to IRS registration and possession of a Preparer Tax Identification Number. Confirming at the start of the CPA search process will save businesses a lot of time. To validate, you can quickly search the IRS Return Preparer Directory.
Check their Licence and Validity
CPAs are also subject to licensing. You can check their credentials with the CPA organizations or EA associations. Verify the important details like a CPA’s license status, issue, and expiration dates. From there, you can also check on any disciplinary proceedings and suspensions they have gone through.
Are they capable of E-filing?
E-filing is the best practice to save time and money. Make sure your tax accountant understands the e-filing process. E-filing your federal tax return provide you with more accuracy for your return. Your refund process will be quicker, in addition to the safety and security of your financial details.
It is one of the essential aspects of finalizing your tax accountant. Compare the estimates provided by the different professionals and choose wisely. Ensure that their fees cover submitting both federal and state taxes. CPAs aren’t often permitted to base their fees on a percentage of your tax refund, so avoid this type of agreement.
Take Written Confirmation
When you finalize the expert and their quote, get a written confirmation. Mention the services they are going to provide, including the audit defense. It will prevent you from fraud or any miscommunication at the later stages.
Is it Worth Hiring a CPA for Taxes?
Self-filing your taxes can be hectic and frustrating, even if you might save money. Moreover, industry-specific tax filing is quite difficult. If businesses and individuals don’t hire a tax accountant, they could suffer greatly. You have to carry out many tax activities, such as completing the proper tax forms, income proof, expenses, employee documents, and more. Therefore, hiring a professional pay you because they will have your back. You can rest assured that they will prepare and file your taxes accurately. A few benefits you can gain from them are:
- CPA will help you to reduce your tax liabilities.
- Moreover, they will utilize software to file your taxes accurately and save them for analysis later to reduce the overhead expenses.
- They can advise you on tax benefits and losses in case of company expansion and acquisitions.
- They will provide insights into the legal tactics that can prevent you from incurring more taxes.
How Long Does It Take an Accountant to do Taxes?
The time taken by the tax accountant depends entirely on the complexity of your business. In the case of personal tax, the time taken will be very short. However, still, the effort necessary to file a return depends on how much paperwork you need to submit to the IRS. The time required includes record-keeping, tax planning, and preparing and submitting the return. Whatever your circumstance, even the busiest accountants can reduce the time commitment required to file your taxes on your own.
Frequently Asked Questions
You don’t need a CPA only for tax season. There are many situations where you should hire a CPA.
1. You own a company.
2. You are a property owner.
3. Having stocks or accounts abroad.
4. Complicated tax documents.
5. Representation in front of the IRS.
If you are looking to hire a tax preparer, ensure they have the following things.
1. PTIN number
2. Valid license
4. Available around the clock
An individual whose income is less than $56,000 or older than 60 years can receive a free tax filing service. You can choose from Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (T.C.E.) programs. The IRS volunteers provide free services.
The major advantages you will receive if you choose a specialized tax CPA:
1. Audit support
2. Tax Advice and Planning
3. Reducing the tax liabilities
4. Save time and resources