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Being a business owner means taking on a LOT of admin and operations work. I’ve been working with small business accountants for a MINUTE, and here is a list of questions I ask when interviewing a new accountant!
Note: This list isn’t exhaustive, and this isn’t a guide on how to make sure the accountant you find will do the best and most legal work for you! It’s intended to be “food for thought,” and does not constitute legal or financial advice.
Question #1: “Who is actually preparing my taxes?”
In some states, an accounting firm can hire someone to do your taxes – who technically doesn’t have a license. Oftentimes, these are people going to school for accounting, who work under the license of the person preparing your tax returns.
Ummmm… come again?
Yep, that’s right! The person who is doing your taxes MAY NOT EVEN HAVE A LICENSE! Some folks are okay with this, as the firm has the non-licensed employee do a “First Pass.”
In my experience, if I’m paying for an accountant, I want a licensed accountant. I specifically ask in these interviews, “Will anyone besides you (the licensed CPA) be handling my taxes? What does that process look like?”
Question #2: “How do you bill for questions about write-offs, or meetings during the year?”
Smart business folks plan for accountants year round, which means that you’ll want to meet with your accountant to go over your larger expenses and plan taxes more efficiently.
Put another way, you’re leaving money on the table if you only see your accountant when you hand off your P&L statements.
Many accountants will charge you hourly for these check-in meetings (which I support!), and may or may not charge you when you call them asking how to itemize an expense.
Make sure you have this information upfront, so you can plan your business budget accordingly!
Question #3: “How will we find ‘extra write-offs’ I may not know about?”
If your accountant is JUST your accountant (ie, they’re not your bookkeeper – someone who may go through and itemizes expenses for the IRS) then chances are YOU are the one who is assigning different expenses to various write-off categories.
If this is the case, you want to be sure to meet with your accountant regularly to discuss where and how you’re spending your money, so they can give you additional insights on potential write-offs you may not know of! That meeting may be charged at an hourly fee, and it’s worth it (in my experience!)
Question #4: “What type of business entity makes the most sense for me?”
A lot of the small business owners I know have filed for S-Corps, or have filed for S-Corp tax status for an LLC. Basically, this type of entity is WAYYY more paperwork, but it can significantly reduce your taxable income.
Make sure to talk to your accountant about what type of business entity makes the most sense for the coming tax year, as changes to tax laws may have you switching things up!
Question #5: “How aggressive are you with write-offs?”
There’s an old accounting joke that goes, “Everything is a write-off, until you’re audited!”
A lot of tax laws are left up to accountants to interpret, and some are more aggressive than others. You’ll need to be sure that you find an accountant that matches your level of aggression.
Question #6: Timeliness and Deadlines
I made this mistake with my first accountant – be sure you understand how many days it will take for your accountant to get back to you, and when you’ll need to submit your paperwork to them for them to file on-time!
Different firms and accountants have different response times, and if you expect to ALWAYS get a response within 1 business day, be sure your accountant has committed to that.
Question #7: Bookkeeping?
Does your accounting firm or accountant offer bookkeeping services? This is something that I’m transitioning to, because an accounting firm can more easily help me find tax write-offs if they’re helping me organize monthly expense reports!
What questions did YOU ask your accountant?
Did I miss anything? If so, comment below with other questions to ask a potential accountant!
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