If you have a small business, then you need a tax professional to help you with your filings. Besides eliminating the tension come tax time, you can keep the IRS off your back if your business taxes are properly organized. You need to find one who is reliable, and who knows what he or she is doing.
If this is your first time, looking for a tax firm, consider the following advice.
Do you truly need a tax firm?
Most entrepreneurs start out as their own accountant, doing their own taxes, besides doing just about everything else in the business. With the introduction of basic bookkeeping applications like QuickBooks, it’s becoming easier for a layperson to keep track of a business’s finance. But a growing enterprise would soon have more complicated needs that are best managed by a professional.
The ideal tax professional will assist a company not only with tax returns, but also with long-term tax planning, business planning, networking, and even personal tax planning if you are the primary stakeholder. Before you begin your search, decide if you need a third party tax firm or someone in the inside.
Consider credentials
The tax firm you should hire should have tax professionals with proper state and/or federal licenses. They should also have a background in filing taxes and dealing with the IRS, especially if you have complicated tax issues. These professionals include CPAs, IRS Enrolled Agents, and tax attorneys.
Due diligence is needed when hiring a tax firm because no matter who does your filing, the IRS will still hold you responsible for their accuracy. Even the IRS is cautioning business owners from fly-by-night preparers and firms.
Keep in mind that all paid tax preparers must have a Preparer Tax Identification Number. By law, paid preparers must sign returns and include their PTIN. The IRS has a directory of qualified preparers that the public can use. Check with it first before you sign one on.
Do due diligence
Unscrupulous individuals in this industry abound that even the IRS is cautioning individuals from unscrupulous tax preparers and dubious behavior.
For one, it cautions against those asking filers to sign a blank tax form. This is an enormous red flag you shouldn’t ignore. Your signature tells the federal government that your return is accurate, even though you have no idea what the tax preparer will put on the document.
Moreover, avoid preparers who base payments on the refund rate or who claim greater returns than their competition. Don’t send tax documents, Social Security numbers and other information when inquiring about the services. The IRS warns that some preparers have misused information without the taxpayer’s permission.
Cuts and Jobs Act Knowledge
Businesses in 2020 need to make extra effort in finding the right tax firm, thanks in large part to President Trump’s Tax Cuts and Jobs Act. The law represents the most significant tax code overhaul in over three decades. The IRS said that it affects nearly every business and individual in 2018 and the years ahead. It advises small business owners to understand how the new tax law could affect their bottom line.
The changes in the law are substantial, and it is understandable that not everyone will know the new provisions relate to their business. This is where a qualified tax firm comes in. Does your tax advisor understand the tax overhaul and how to implement it? The ideal candidate should be able to explain to you how the overhaul could affect the amount of taxes you pay.
If you need professional help, our experienced tax professionals can help guide you in the right direction. Contact us today at 818-452-2641 or fill out our contact form to schedule a free consultation.
