How to Find and Hire the Right Tax Advisor for your Business

© | Andrey_Popov

In this article, you will learn 1) why it is important to have a good tax advisor for your business, 2) define your company’s needs, 3) a step-by-step process for hiring the right tax advisor, and 4) conclusion.


A good tax advisor is someone who can not only do the taxes for your business but can advise you on the structuring of your business. Selecting the right tax advisor is critical. There are different types of tax advisors, and it does matter who you choose to help you. When selecting a tax advisor you need to know the difference between a CPA, a CMA, an EA, and a tax attorney, and what each can do for you and your business. You need to ask questions, not only of the person you are getting ready to hire, but of others in similar types of businesses to find out who they recommend for tax advice.

The Internal Revenue Service Tax Code changes, and even a small business can lose money or make filing mistakes. Since small business owners have enough on their plates taking care of their own clients, customers, and products, it makes good sense to turn over taxes and associated items to someone who knows the law and can keep you out of trouble. Face it; we don’t know what we don’t know. Those working in the tax business go to continuing education courses, receive updates, and are interested in tax advising.


Assess the areas of work for a tax advisor.

Some business owners only need help with their taxes. Other business owners need advice on setting up their business entity, keeping their books, figuring payroll taxes, and potentially representing them if tax mistakes have been made along the way.

There are many ways a tax advisor can assist you and your business. Many small businesses need someone to take care of their taxes. At tax time, the business owner makes an appointment and comes in with income and expenses and, much like getting your personal taxes done, someone takes the papers and makes tax sense out of them.

You may need help tax planning for your business, which means working closer with a tax professional rather than a once a year drop off or transmitting income and expenses. There are other needs as well. You might want someone who is an accountant, a tax attorney, or an enrolled agent (EA). Each provides a service that is very different from the other.

Assess the amount of work and the frequency for a tax advisor.

When deciding who you want to hire and what role they will fulfill for your business taxes, you also need to decide how much work you have for that person. Initially, you might be the person who is using QuickBooks, Quicken, or other small business software to track your income and expenses. If you find yourself doing more and more in the tax realm rather than taking care of the customers or clients, then you might want to consider hiring an accountant. You need to decide if it is better to hire an accounting firm or hire someone like an inside accountant. For most small businesses, it is better to have a trustworthy individual or accounting firm that can give advice and take care of taxes and tax issues. However, as the business grows and a considerable amount of tax planning needs to take place, it might be the right time to consider an inside accountant solely dedicated to your business.

Understand what you need.

The most important part of securing an accountant is knowing what you and your business need. However, you might not know exactly what you need. Kelly Phillips, a tax attorney who writes for Forbes, admittedly does not do her own taxes. Her point in sharing that information is to stress there is a difference between the skills of a tax attorney and a CPA. Getting the right help might be a process of discovery.

One way of getting the type of assistance you need for your business is to ask other small businesses what types of services they use. Another method is to interview a variety of tax professionals to see what type of services and help they can provide, how they charge, and if they are seasonal or year round.


By asking other businesses about the same size as yours, you might get some information about tax advisors who are local, friendly, helpful, and some pricing information. However, don’t stop there. Asking around is a good first move, but there is so much more to a business than meets the eye; it’s taxes, assets, employees, goods and services. Unless you ask a business that does exactly what you do and do it in the same way, there could be major differences in the tax consequences.

Step 1: Choosing Well

The terminology can be confusing. There is a difference between what a CPA (Certified Public Accountant) can do for your business and an EA (Enrolled Agent). It is important to know the difference in order to make an informed decision before you hire.

CPA Versus EA

A CPA is often thought of as someone who can do the taxes for a business. However, their services are much broader and include tax planning, auditing services, setting up controls to guard against financial fraud, measuring the performance of the business, compensation plan evaluations, and even disaster recovery planning. The CPA can also help you determine if it is fiscally feasible to purchase a business or sell a business. CPAs provide much more extensive services than just preparing taxes.

An EA is an Enrolled Agent. To qualify as an EA, the person must pass a three-part examination or have been a former IRS employee. Like CPAs, EAs can represent those they want. They also have to take continuing education each year to keep their licenses. Unlike CPAs, EAs do not give a wide breadth of advice about your business, but instead focus narrowly on your tax preparation and tax resolution (if needed).

Recommendations from Other B2B

Word of mouth is a powerful tool when looking for services. Ask other businesses if they use a CPA or an EA and what their experiences have been. Often you will find other business owners forthcoming with tax advice, who to call, and what they believe you need. If making a cold call to ask another business about taxes gives you a chill, use your network. Post on forums that target your specific type of business. Other business owners might be more forthcoming when you are not face to face. Attend networking events for businesses like Chamber of Commerce coffees and outings, business expos, and trade shows, and seek conversations regarding taxes there.

Getting the Advice on Your Business Entity

A CPA can assist you prior to setting up your business by advising you on the tax consequences of different entities since there are many from which to choose. The easiest business entity to start is a sole proprietorship where there is one person who is responsible for all the decisions. The sole proprietor is liable for all business expenses, and their personal assets are at stake. Any mistakes will be the responsibility of the one owner.

The CPA can also help you determine if your interests will be better protected in a partnership, Limited Liability Partnership (LLP), C Corporation, S Corporation, or even a Limited Liability Corporation (LLC). It is important for the business and the individual(s) involved that they set up their business correctly. This is especially true if the business wants investors, funders, governmental contracts, or grants. A CPA can help those involved in selecting the best choice.

Step 2: External Versus Internal Tax Advisor

As a business owner, another option is whether you need or want someone external or internal to your business to advise you regarding your tax liability.

Duties of an External Tax Advisor

An external tax advisor or accounting firm can offer you help in preparing your taxes. An external tax advisor can also help with preparing financial statements and financial problem solving. While an external accountant might be pricey, he/she is worth the money since they can provide a professional look at your business finances. If you hire well, the external accountant will save the company money over time.

Duties of an Internal Tax Advisor

When a business grows in revenue and transactions, it becomes more complicated for an external accountant to take a “look” at the books, so it is time to hire someone for an internal position. An in-house accountant can set up the entire flow of financial operations and manage payroll, cash flow, daily transactions, bank reconciliations and many other financial aspects of the business over and above taxes. A plus of having an internal accountant is having that accessibility without additional fees.

Best Time for External Versus Internal Tax Advisor

As a business owner, the question arises, when is it the best time to hire an external or internal tax advisor or accountant. There are several considerations, the first of which is the size of the business. If the business is small and you or someone is able to manage the bookkeeping with small business software on a daily basis and you only need tax preparation, then external is a good choice.

If there are transactions, purchases, or tax planning issues that could benefit from a closer review, then an outside accountant or accounting firm is warranted. It is possible that as you grow your business your tax preparer will mention that you need an accountant more frequently than the once a year tax filing.

If you find your business is growing rapidly or has grown to a large volume, you may want to seek an internal accountant. Here is where you have to weigh the cost of a full-time salary versus the benefits you are likely to receive having daily financial advice. Look at what you need first. Do you need a bookkeeper or an accountant?

Step 3: Questions to Ask Prior to Hiring

Occasionally when individuals, even business owners, hire a professional, they seem intimidated. You are hiring this person or firm and spending your money, so you need to ask questions to make sure you are getting what you expect. The letters behind the name might be daunting, so ask what they mean and where they come from if you do not already know.

Education, Continuing Education and Certificates

A CPA has a four-year degree. Then he/she sits for a CPA certification examination for their state. After they are certified, they must continue to take courses in their field in continuing education so they can remain certified and licensed. Within the CPA field, there are additional specialties. noted that some CPAs have Personal Financial Specialist (PFS) designations or are accredited in Business Valuation (ABV) or are classified as Certified Valuation Analysts (CVA).

If you are hiring someone internally, your business might benefit from someone who is a Certified Management Accountant (CMA). A CMA is an accountant who has management experience. This accountant can work with numbers and be on the management team of the organization.

Cost – Hourly or Flat Fee

If you are hiring externally, ask if you are hiring one person in the firm or if they will be delegating your work to someone else. Your business information may not be handled there at all if they use freelancers or independent contractors. These questions will help you determine if you are willing to pay for the service they are offering. Ask about their costs. Some firms and individuals charge by the hour while others charge a flat fee. If there seems to be some hesitation on the part of the accountant, offer to show them your last year’s tax return. The accountant should be able to gauge the firm’s fees from the complexity of your return.

Industry Expertise

When you are looking for an accountant, ask if he/she has worked with any business that is similar to yours. Do they have any experience in your industry or business? Find out how long they have been an accountant. It is also notable to ask the other types of business and industries they have worked with in preparing taxes or giving advice. Make sure you let the person know you are not asking them to disclose business names or data.

Availability – Is It You or Do You Outsource?

Ask when the accountant is available to you. Will this be a tax time relationship or will they be open all year to answer questions for you? Outsourcing may make a difference to you if you are someone who likes to ask questions about the return or other documents. If the accountant outsourced the job, you will not be talking to the person who prepared the documents.

Explaining Numbers or Mere Filing Help

A good accountant is someone who will take the time to tell the business owner what the numbers mean. Yes, the business owner can read the numbers, but interpretation of those numbers is a function an accountant can expertly provide. The accountant can make recommendations about the health of the business.


When selecting an accountant, make sure that person can handle the complexities of your business. If you are offering stock options, then you want to make sure your accountant has worked with companies that have also offered stock options. Ask for someone with seniority in the firm. Individuals who have seniority in an accounting firm have had more complex cases to work on and will be better equipped to handle your issues.

Years of Experience

Years of experience go along with seniority. You want to make sure you hire an tax accountant who has at least five years of experience. Any less and they might not have worked with enough clients to give good long-range advice. Individuals who work in a larger accounting firm may have been exposed to a wider variety of tax issues, even if those were not their direct clients. If hiring an individual, ask about their years of experience also.

Step 4: Choosing the Tax Advisor and Chemistry

Ask Friends and Colleagues for Recommendations

Initially, you can start your search online for the names, addresses, phone numbers, and types of tax accountants near you. However, prior to contacting, ask others for their recommendations. If you know you do not need a CPA, but someone to do simple business or personal taxes for a sole proprietorship, friends and family members can be of assistance. Often they can give you information about the service, price and outcome of working with the person you are asking.

Hiring Someone with Whom You Can Work Well

You are paying for a service: make sure you are comfortable with the accountant you hire. You should have a good relationship and be able to establish trust with the one you are hiring to do your financials for you and your business.

Bigger Isn’t Always Better

Hiring a large firm to do your accounting might seem like a good idea since you will have multiple people with a vast amount of knowledge and experience. While this is true, if you are a small business, or one that does not have complicated tax and accounting issues, you might be paying for services you do not need and will not use. If you do your homework and select the right firm or individual, then you can save your business money both in fees and tax consequences.

Use Your Gut

If the accountant you are meeting with makes you feel inferior or stupid, then the relationship is off to a bad start. Make sure the accountant is willing to discuss how often you need to meet or exchange information. Establish how you will communicate. Also, ask if you will deal with him/her directly or if there will be a staff person involved in your services. If so, ask to meet that person. You will want to establish a relationship with them as well.

At the conclusion of your first meeting, trust your gut. If you felt concerned, alarmed, or inferior, then you may need to hire someone else. You do not want to hire someone hoping the communication will improve. If the firm seems too busy to assist you, then they are, so look elsewhere.

Sharing the Same Tax Philosophy (Write Off More or Be Conservative)

When you are selecting your tax professional, make sure they share your tax philosophy. If you want to deduct all you can, but your accountant is talking about the potential of IRS audits you might not share the same philosophy. On the other hand, there might be areas to compromise; see if your accountant is willing to entertain those. If you are concerned about an IRS audit, but your accountant keeps pushing you to maximize your deductions, you may be at odds. The bottom line is that you have to be comfortable with the tax philosophy and accountant you are using.

True Availability

Some accountants are available all year to assist their clients with advice and questions. Others are difficult to locate after tax time. You need to find someone who will fill your needs. If you are looking to expand your business in the next year, you might want someone who is more available. Another form of availability is when you call with a question or need something from them or their office. How quickly does your accountant return your calls, emails or find information for you?


Choosing the right tax professional looks like a daunting task. It is important to choose carefully. Ask others who they use and their level of satisfaction. Meet different individuals who handle business taxes, CPAs, CMAs, tax attorneys, and EAs. Determine the type of service you need and how often you will need help. If you are a small business, then an external accountant can help, but if you are a larger business or a rapidly growing business, you might want to consider hiring an internal accountant.

Whatever you do, do your research. Preparation prior to hiring can help you secure someone who can save you and your business money over the course of your relationship.

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