Tax season is here folks. Do you have a tax preparer?
Most young companies scramble at year-end to find someone to help prepare their taxes. But don’t scramble too much – you don’t want to be hasty in finding the right preparer for your business.
Make sure you ask these questions to know if they are the right fit:
Q: Are you certified?
A: There are different levels of certifications. Basically, what you need to know is that anyone with a preparer tax identification number (PTIN) can prepare tax returns for compensation, but their representation rights differ. If you want a tax preparer that can potentially represent you on any matters including audits, payment/collection issues, and appeals, they need to be an attorney, CPA, or enrolled agent. Folks with limited representation rights (not attorneys, CPAs or enrolled agents) are encouraged by the IRS to get continuing education and part of a new voluntary program. They have limited representation rights, which means that they cannot represent clients whose returns they did not prepare and they cannot represent clients regarding appeals or collection issues even if they did prepare the return in question. Your tax preparer should have some sort of certification in this regard – if he or she does not, you can’t expect the best return.
Q: Do you do this for a living?
A: Some tax preparers do it as a side job, which is fine, but you want to make sure they know what they are doing. To put it in perspective, someone who lives on the money they make from doing tax returns are doing hundreds of them a year. You can trust their experience a lot more than someone who does 2 or 3 a year for some extra cash. They are much less likely to frequently update their training and certifications, which means they likely aren’t as up to speed on the latest in deductions and tax laws.
Q: Have you worked with businesses like mine?
A: If you are a company of five, you might not want to work with a tax return preparer that typically works with Fortune 500 companies. While they very well will be able to handle your return, it’s much more likely they will know the tricks of the trade if they are working with businesses your size day-in and day-out.
Q: What do you charge?
A: An obvious question that comes into play pretty quickly. A flat fee is ideal to most businesses in case some conflicts arise, but some preparers still expect to be paid by the hour.
Q: How long will it take to get my return?
A: These guys are working around the clock to get their returns filed in a short amount of time. The general rule is first come first served – the earlier you get them your paperwork, the earlier you get your return. If you procrastinate, you can expect to wait a bit.
Q: Do they follow security/privacy filing protocols?
A: If e-filing their answer should mirror this IRS FAQ.
Q: Will you cater to my preferences?
A: Every business is different with different requirements or preferences. But not all tax preparers must comply. Drawing up a list of your must-haves will definitely help you weed through the options – do they e-file? Do you need to meet with them in person or can it be virtual? Will they walk you through specific options you have and the potential returns or risks associated? Do you need help with next year? Do they account for retirement planning as well?