When it’s time to hire a tax accountant, you need to be thorough in your selection process. Asking the right questions can ensure that your accountant understands your type of business, has experience dealing with the IRS, and can provide valuable advice throughout the year.
In this article, we’ll discuss ten crucial questions to ask potential accountants and touch on some essential aspects of the accounting services they should provide.
1. Understanding Your Type of Business
Your accountant must understand your specific business type and industry. Different industries have unique tax rules and regulations, making it essential for your accountant to have relevant experience. A crucial question is: “What kinds of clients do you work with?” This will help you gauge if their expertise aligns with your business needs.
Accounting Services
A reliable tax accountant should offer various accounting services tailored to your business requirements. These may include financial statements, budget management, and even assistance with your online financial tools. By providing a comprehensive service package, your accountant can become a valuable resource for your business.
2. Ensuring Year-Round Availability
Some accountants operate primarily during tax season, which can leave you without assistance for the rest of the year. Running a successful business requires constant financial planning and tax help. Therefore, confirming their availability is essential by asking: “Are you available year-round?” Your accountant should be available to support your financial needs whenever necessary.
Professional Bookkeeping Services
Accounting services should include professional bookkeeping services as part of their offering. Bookkeeping helps maintain accurate financial records, which are crucial for assessing the financial health of your business and making informed decisions. Ensuring that your accountant provides these services can give you peace of mind and a clear financial path. You may visit their website to learn more about their expertise.
3. Assessing IRS Experience
Dealing with the IRS can be intimidating, and having a tax accountant with experience navigating tax administration makes a significant difference. One crucial factor to consider is comparing the expertise of Certified Public Accountants (CPAs) and Enrolled Agents (EAs). The question is, “What’s your experience with the IRS?” This will let you know if they can competently represent you during audits or other tax-related matters.
Tax Accounting Services
In addition to bookkeeping and general accounting, a tax accountant should also provide specialized tax accounting services. This can involve navigating complex state and federal tax laws, identifying potential deductions, and managing tax administration tasks. Ensure your accountant has the expertise to handle these critical responsibilities.
4. Clarity on Work Delegation
Some accountants may outsource work to third-party providers, which can affect communication and the quality of service. To avoid any confusion, make sure you ask: “Who will be doing the work?” Knowing who handles your financial and tax obligations can build a transparent and trusting relationship with your accountant.
5. Checking Their Approach to Deductions
Accountants typically have different approaches to deductions, some conservative and others more aggressive. Their approach must align with your preferences and risk tolerance. To determine their stance, consider asking: “Are you a conservative or more aggressive accountant?” This will help you find an accountant who shares your deductive philosophy and minimizes potential conflicts.
6. Inquiring About Billing for Services
Understanding how your accountant bills for their services can prevent surprises and help you budget accordingly. Some charge by the hour, while others offer flat rates. The critical question is: “How do you bill for your services?” This information will help you determine the most cost-effective option for your needs.
7. Handling Multiple Entities
If your business has multiple entities, it’s crucial to ensure your accountant can efficiently manage them. To assess their capabilities, ask, “How do you handle working with multiple entities?” Their response will indicate whether they possess the skills to coordinate and track financial activities across all your business entities.
8. Knowledge of Specialized Plans
Accountants should be familiar with specialized plans, such as the Medical Expense Reimbursement Plan, which allows you to deduct family medical expenses on your return. To gauge their expertise in this area, ask: “What can you tell me about the Medical Expense Reimbursement Plan?” A well-informed response indicates they are up-to-date with relevant deductions that could save your business money.
9. Familiarity with Tax Software
Using popular tax software, like QuickBooks, can facilitate the transfer of information between different accountants if needed. Make sure to ask: “What tax program do you use?” Choosing an accountant who uses widely recognized software can ease potential transitions and ensure compatibility with your existing systems.
10. Discussing Communication and Tax Planning
Effective communication is crucial when dealing with tax issues. It’s essential to know how often you can expect updates and consultations from your accountant. The question is, “How often will we communicate about tax issues?” Their answer should align with your expectations and ensure you feel comfortable seeking assistance.
The Bottomline
Taking the time to ask these critical questions will help you find the right tax accountant for your unique requirements. Ensuring that they understand your type of business, have the necessary experience, and can offer comprehensive accounting services will make working with your accountant a smooth, beneficial experience. Remember, your tax accountant shouldn’t only be a numbers person but also an advisor who helps your business grow and succeed.
