Small Business Tax Help
Getting Help with Your Small Business Taxes
With all of the responsibilities and duties a small business owner faces on a daily basis, learning about taxes and keeping up with changes can be a significant challenge. Even if you have a solid understanding of small business taxes, it is still a good idea to consult with a tax professional from time to time. Small business tax help comes in many forms and there are many providers to choose from including accountants, lawyers, enrolled agents, and tax preparers. Almost anyone can claim to be a tax expert, however, so you and your small businesses can benefit from understanding the differences between them and knowing which to choose given your specific circumstances and the kind of tax help you need.
Small Business Tax Advice
Tax advisors come in all shapes and sizes. From the strip mall tax preparer advertising fast filing and rapid refunds to the big international accounting firms that routinely audit the financial statements of Fortune 500 companies, obviously not all are created equal. Regardless of the type of business you run, try to find a small business accountant or other tax professional experienced in or who specializes in working with small businesses. A tax professional who understands the kind of business you are in or who has existing clients in your industry would be ideal. The kind of tax professionals you have to choose from generally fall into one of a few categories:
- Tax Preparer: A tax preparer is simply someone who completes your tax return on your behalf. People who prepare tax returns for others do not have to be licensed by the IRS, though they can be. Tax preparers do not specialize in tax planning, providing legal advice, or help with IRS problems and would be inappropriate if you had these types of issues or needs beyond filing your return. Even if all you need is a little help completing your tax return to free up some of your time, ask anyone you are considering hiring about their background and any professional designations they may hold. Taxes for small business tend to be more complicated than individual tax returns so you will likely want to find someone with a small business background who can provide advice when requested.
- Enrolled Agent: Enrolled Agents are tax advisors licensed by the IRS. The EA designation means that a person has passed the required comprehensive examination covering all areas of the tax code or that a person has worked for the IRS for five or more years in a position where the tax code was routinely applied. An EA can help prepare your return, interpret the tax code for you if you have questions, give advice, and represent you in dealings with the IRS.
- Accountant: A Certified Public Accountant is licensed by the state in which they practice and is able to help in all areas that would be a concern to a small business owner including preparation and planning. A CPA can provide advice and help with complex business tax returns involving tax credits, tax deductions, write offs, depreciation, and other matters. You can hire CPAs through small local firms or large national outfits. Finding a small business accountant who specializes in or who has experiencing with helping small businesses is best.
Small Business Tax Help is Available
- Tax Attorney: Tax attorneys are lawyers who have obtained a postgraduate tax law degree (LL.M or Master of Laws) or have a certification from their state bar association in taxation. If you have a dispute with the IRS, require legal representation in a tax related court proceeding, or need advice on the tax implications of significant events like changing your business structure or hiring employees, a tax attorney may be the best or in some cases your only choice.
How to Find Tax Help for Your Small Business
If you need small business tax help now or anticipate needing help in the future, finding the right tax professional for you is extremely important. In addition to standard considerations such as cost, experience, and location, you will want to find a firm or individual that you feel comfortable enough with to build a long term relationship. Having someone you trust that you can call any time a tax issue comes up or something happens that could impact your tax situation is a great resource. There are a number of ways to find good tax help.
- Ask for Referrals: You can ask people in your industry, vendors, friends, or family for their recommendations. Anyone willing to share a name and their experiences, both good and bad, can get you pointed in the right direction.
- Ads: Newspapers, phone books, trade journals, and any publications you subscribe to contain or may contain advertisements from service providers such as tax preparers, accountants, and lawyers. Advertisers are obviously looking for new clients and trying to portray themselves in the best light in their ads, so you may need to do some more work in qualifying them if you are responding to an ad than you would if you were following up on a referral from a colleague.
- Professional Associations and State Resources: Professional associations for accountants, enrolled agents, or attorneys as well as other groups such as CPA societies can usually refer you to an accountant or tax attorney. For example, the National Association of Enrolled Agents website allows you to search for an EA in your area. Official state resources can also be very helpful. Your state licensing agency for accountants may be able to provide a list of CPAs in your area and the bar association in your state may have a lawyer referral service you can use to find a local tax lawyer.
Hiring a Tax Advisor or Tax Preparer
No matter what sort of small business tax help you need, before you hire a tax professional you are going to have to ask questions. Approach hiring a tax professional as you would hiring any other sort of employee. That means being prepared and interviewing more than one candidate. Ask for references. Ask about their experience level and whether they work with small businesses and/or other companies in your industry. Ask how much experience they have dealing with the IRS. Ask as many questions as you need to in order to get a sense of what working with the person you are considering would be like. Ask about fees.
In addition to conducting preliminary interviews with prospective tax pros, you will also need to ask yourself some questions as well. Do I feel confident about this person? Do I feel comfortable asking questions and speaking with him or her? Am I satisfied with the answers I received? Would you want this person representing you to the IRS? Can my business afford the rates I was quoted? Only after you have gathered information from the tax professionals you are considering hiring and considered your impressions of the people you met with can you make a decision.
Fees for Tax Advice
Good tax professionals do not work cheap, but an expert can save you money and help you avoid problems in the long term so their fees are well worth it most of the time. There is no set rate or standard fee schedule so if you approach multiple service providers you may get a wide range of prices as every firm sets their own rates. In general, enrolled agents charge less than CPAs or tax attorneys. Any small business, from startups to more established businesses, would be wise to shop around and compare rates before choosing as budget is likely to be a consideration. Get a written fee agreement and an estimate for any work you need done up front so you are not shocked when the bill comes.
Small Business Tax Help
When you find yourself in need of some small business tax help, do not rush the process of finding the right tax pro to help you. Do not be afraid to take your time and call or visit multiple prospects. Use all of the resources available to you to find someone qualified and experienced who makes you feel comfortable. Once you find this person or firm, build a long term relationship with them as the more they know you and your business, the more they can help you.