Find a reputable tax professional before tax season ramps up.

Tax Day is more than six months away, so why think about selecting a tax preparer? Because the best time to choose a tax preparer is outside of tax season when tax professionals aren’t fully booked. If you started a business this year or were dissatisfied with your experience last year, now is a good time to engage a tax professional for the 2023 filing process. Here are tips on choosing a tax preparer.

Ask for recommendations

One of the best ways to find a reputable tax professional is to ask others for recommendations. Ask colleagues, friends, fellow business owners and clients who they use. Word-of-mouth recommendations are some of the most powerful.

Determine if the tax preparer is qualified

The IRS recommends asking about a tax preparer’s qualifications—and if they keep up with continuing education.

Keep in mind that only enrolled agents, certified public accountants and tax attorneys have unlimited representation rights to represent you before the IRS in all matters. For example, they can speak on your behalf in the case of audits, collections and appeals. Other tax preparers, such as annual filing season participants, can only represent you in limited representation situations.

Ask what you can expect when working with the tax preparer        

Have a conversation with potential tax preparers to find out what it’s like to work with them. Consider asking questions such as:

• Have you worked with businesses like mine? For example, an LLC filing as an S Corp, or a single-employee consulting firm.
• What does your tax preparation process look like?
• What are your fees?
• Can I call you throughout the year with any questions?
• How can you help me strategize for taxes and retirement savings?

Business owners benefit from a preparer who’s available year-round, especially when it comes to tax strategies and retirement savings in a continuously changing economy. Also, look for someone whose expertise aligns with your specific business.

Tax preparers to avoid

When it’s time to file your return, the IRS warns you to be on alert for ghost preparers. These are people who don’t sign the tax returns they prepare; they often promise big refunds or charge a fee based on the size of the refund in an effort to make a quick profit. Ensure that your preparer signs returns and supplies their Preparer Tax Identification Number (PTIN).

You can also check with the Better Business Bureau to see if there are complaints against a tax preparer.

Set aside funds for taxes

One thing many new business owners and freelancers overlook is their responsibility to pay quarterly estimated taxes. A tax professional can help calculate how much to set aside in order to avoid penalties. Putting money into a Consumers business savings account as income is earned can help avoid a cash crunch when federal and state income taxes are due.

Remember, no matter who you select to prepare your taxes, you are responsible for what’s on your return.

 

All loans subject to approval. Rates, terms, and conditions are subject to change and may vary based on credit worthiness, qualifications, and collateral conditions. Federally insured by NCUA.