How do I find a good business accountant?
This is a common question asked by many business owners, investors, and traders. The answer is simple, but needs a little background.
First, good business tax preparers are in short supply. Why? Because the market is flooded with bad ones. In fact, in a recent IRS study of chain preparers, they managed to screw up the business taxes in 100% of the cases. Wait – did I really just say 100% of the business tax returns had errors? Yes.
They did a second study to see if the numbers were really that bad. The scope of preparers was expanded so that not only the chain preparers were tested. The results: a whopping 6% of business taxes were done right.
So what do you do if so many preparers don’t know what they are doing when it comes to business taxes? Step one is to understand the problem. They are no licensing requirements by the IRS for preparers (this will change in the coming years). That means the tax professional you though was a professional, may simply be a moonlighting public employee in search of a few extra dollars.
Use tax professionals that have degrees, licenses, work with a company that handles business taxes as a specialty and that has other professionals as well. Believe it or not, but some of the best business tax professionals are attorneys and planners, so it makes sense to find accountants that work with attorneys and planners.
Finally, make sure your tax professional has business experience. The only way to truly understand business taxes is to have dealt with them on a personal level at some point. Basically, you need someone who has "been there – done that" in business and understands what you may be going through in your business. A little practical experience goes a long ways when deciding on a business accountant.
