When you're trying to find the best tax accountant for your business, you don't want to hire a dud.
Tax laws are black and white. Your situation is not.
Your tax liability can and will change based on your financial position and your future wealth strategy. The best tax accountant for your business understands both concepts.
4 Tips toFind The Best Tax Accountant
Here's a quick rundown on what I would look for if I were shopping for a new CPA to be my tax accountant:
#1 Billing Style
In the olden days of yore, all tax accountants billed by the hour. Not so, anymore.
Many of them have switched to a project-based pricing model. They bill you based on the scope of the project.
Project pricing may sound great because it models a fixed fee, but be careful here -- the tax accountant is the one determining the value of the project, not you.
When I first launched Ignite Spot, I met a tax accountant that charged over $20,000 for a project that took him less than two hours. Horrified, I asked him how he could justify that price tag.
He bragged about his credentials and explained that he had saved the client huge headaches down the road.
So what?! The client was cash-poor and still had to pay a significant tax liability. The transaction nearly put him
out of business.
I do like project-based pricing as long as the tax accountant, and you determine what the project is going to be and why that's important.
I'm not worried about how long it took the CPA to do the work as long as the result is the best possible outcome.
Let's agree on what that outcome should look like before we get started.
#2 - Avoid the Crooks
It's illegal for a CPA to take a percentage of your return as payment for his or her services. If a tax accountant says, "My fee is 20% of whatever you get as a return," then get out.
That's a major red flag. It means that both you and the CPA will be on a date with your local law enforcement soon.
#3 - Get a Strategic CPA
CPAs come in two flavors: technician and strategist. The technician knows all the rules of the game, and giggles out loud when he gets to apply them to your situation.
He's full of glee when his technical prowess gets to shine. Knowing all of the rules is great, but again, your situation is different from the next business owner, and we need to apply those rules to your strategy.
A strategic tax accountant has more than the current year under consideration. He or she is trying to determine how changes today will affect you now and in the future. Granted, we don't know the future and we sure as heck don't know what Congress is going to do, but we can do our best to build a strategy.
The best tax accountant applies the tax laws to your situation. A lousy tax accountant applies you to the black and white tax laws.
#4 - Interview your Tax Accountant
Just because this person is a CPA doesn't mean that they know what they're doing. I've met some dopy CPA's in the past.
The best tax accountant is a CPA. True. And yes, you should make sure of that credential before you hire this person.
There are other things that you can find out as well. Ask them what software they use to prepare taxes. If they say TurboTax, find the door and run. I have nothing against TurboTax, but if you're a business owner and you're looking for strong tax planning and advisory guidance, you need bigger ammo. Sorry.
They should be in Drake, Lacerte, GoSystem, or ProSystem as a general rule of thumb.
They should also be using a research product to stay on top of the most current tax laws. Ask them what they use. If they say Google, this isn't your Tax Accountant. Get out.
Finally, ask them what they do for CPE (Continuing Professional Education). All CPAs are required to maintain CPE credits to keep their license. What is this professional doing to stay sharp?
Many people rely on your business for income, guidance, products, services, and more. One bad year of tax planning can put all of your hard work down the toilet.
The best tax accountant uses a billing structure that you're comfortable with, isn't a crook, has the right mindset, and is armed with all the proper credentials and tools.
Your tax accountant is a vital role in the strategic vision of your company.