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  • April 1, 2021

Choosing right come tax time

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Choosing right come tax time

Choosing right come tax time 1024 683 360 Wealth Consulting

Small business owners and individuals often struggle to find the right professionals. I know I’ve made mistakes with service provides for the business as well as trade specialists at my home. It makes sense. You hire people to do things you don’t do. It can be tough to know who’s right or wrong for your needs.

Fortunately, there are easy ways to identify a good tax preparer. It’s not just the return preparation fee or mistakes made on current year reporting you need to consider. With the rapid changes in tax law we’ve seen over the past few years, you’ll pay dearly for mistakes made three years back automatically, and six years in cases where substantial errors are found.

When price is the pitch, you get what you pay for

You’ve probably heard local firm claims they’re cheaper than the big guys. I’ve learned the hard way to be wary of those who compete on price. It’s tiring and expensive to fix work done wrong the first time.

Let’s look at how those national tax preparation chains operate. They don’t require experience from those they hire. There are no credentialing requisites. It’s unlikely your preparer is current on tax law. According to Indeed, the hourly rate at H&R Block for an office coordinator is $9.22. That’s below poverty level for a family of three. Ouch.  Makes you wonder what kind of expertise you get from a firm that claims they’re cheaper.

Do credentials matter?

It depends. CPAs may not have current tax knowledge. Enrolled Agents (EAs) are licensed by the IRS and specifically trained in federal tax planning, preparation, and representation. They’re also required to complete 72 hours of continuing education every three years.

It’s important you engage a firm that’s familiar with the constantly changing tax landscape. With credentials, advanced education is a given; continuing education requirements are likely. If not, the knowledge you’re getting may be old news. That’s scary stuff to consider for the small business owner. The IRS admits small business owners are 150% more likely to be audited than other tax payers.    

QuickBooks Pro Advisors are useful too. New balance sheet and other reporting requirements for small business owners make this tool a wise one to integrate into your bookkeeping. 

Choose long-term thinking

DIY or cheap might seem prudent for your small business tax needs, but chances are, hiring the right provider will save you more than they cost. Tax returns aren’t boiler-plate. A contentious tax specialist can find tax saving strategies churn-mills can’t. There’s that peace of mind thing, too. Audits are stressful enough without the added challenge of trying to defend errors you can’t.