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Choosing Your Tax Professional

After your first tax installment, the question now becomes how to choose a tax professional….in short, it should be almost like a date.

Almost like a Date

If you were a Fortune 500 company, there is no doubt that you would have full-time staff to deal with your books and taxes.  However, most startups are, at most, a handful of individuals.  Consequently, accounting and tax issues will have to be outsourced.  For issues of internal control, it is far better to have one person prepare your accounts and another prepare your taxes. 

The most important aspect when you pick someone to either prepare your accounts or taxes is that you feel comfortable with them. If you don’t trust them or their ability, you will never be happy with the results especially if something happens.

Some of my now most loyal clients came to me because their previous tax professional did something funny that they didn’t like or, in reality, the IRS didn’t like.  Nonetheless, they wanted someone else to fix the problem.When speaking to my clients, they tell me that they didn’t really trust what their previous tax professional was doing or the tax professional themself couldn’t explain it to them. Consequently, if you are not comfortable with your return for whatever reason, you need to say something.  If your tax professional tells you don’t worry about it and it is fine, you need to find another one, immediately.

Besides the issue of trust, in today’s world, you want availability.  Too many tax positions are seasonal employees thus if there is an issue in August, you will have to talk someone else or wait weeks for a response.  If there is a fire that needs to be put out immediately, hours can seem too long.  Truthfully, in today’s ever instant world, there is no reason for a delayed response, so make sure that you can always reach yours because you may never know when you need them. 

Pricing

There is no simple answer or formula.  I would be wary of anyone who promises a fixed price before they even see your documents.  Either they are way undercharging you so the service will probably not be very good or they are charging too much and you will feel ripped off.  Therefore the price should be determined after your tax professional asseses your situation and the necessary work it will entail.

Even then, it is difficult to suggest levels.  For instance, one of my clients is a lawyer who has an s-corp.  He has a total of four items on his return.  I feel bad charging him $200.  In contrast, my most complicated client has well over 30 rental properties on his personal return, I charge him $3,000 per return but I have peers who say that I am undercharging him.

So my only advice would be to discuss it before the work starts.  You want a price that you feel is fair so that your chosen tax professional provides the service you want.  To be honest, always err on the high side.  I say this because if you have any issues or problems during the year, you want your tax professional to want to talk to you and not annoyed that you are wasting their time, time that they could be doing another return.  Furthermore, you don't want them to think about charging you, like lawyers do, for every email and question as this is not the foundation for a good relationship.

Brian Lang is enrolled to represent clients before the IRS and thus can help you with any of your tax needs, you can email him at tax@brianlang.me if you have any further questions.

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