How to Find the Best Tax Accountant for Your Small Business

Running your own business is like being a one-man band. You’re not just the singer-songwriter, you’re on drums. And bass. Oh, and you’re also in charge of booking events. And selling t-shirts and stickers.

It’s a lot.

And because even rock stars get to pay taxes, it’s a great idea to find a tax pro who can help you keep Uncle Sam off your back.

 

What Is a Tax Accountant?

A tax accountant is a professional who can help you calculate what you owe in federal, state and local taxes, and prepare and file tax returns. They can also advise you on (and help you make a strategy for) your business taxes. Also, every CPA is an accountant—but not every accountant is a CPA.

What Does a Tax Accountant Do?

A tax accountant does a lot more than file your return. Here’s what they actually handle:

• Tax Advice and Planning: Advising you on business decisions that affect your taxes—before the bill arrives
• Tax Compliance and Reporting: Making sure your books are accurate and your business isn’t breaking any tax laws
• Financial Management and Consulting: Spotting where your business is losing money and helping you fix it
• Forensic Accounting: Uncovering fraud or missing money (often a specialty, not a standard service)
• Payroll Administration and Oversight: Keeping your payroll withholdings straight so you don’t run into IRS trouble
• Quarterly and Annual Tax Filing: Filing your taxes—quarterly and at year-end

Let’s take a deeper look at the specifics of how a tax accountant can help you and your business.

Tax Advice and Planning

As an advisor, your tax accountant analyzes your financial data to help you make better business decisions—specifically from a tax liability perspective. Anything to help reduce your risk and build your business stronger, right? (Everybody wants that.)

• Cost Accounting and Budgeting: They analyze the operational cost of running your business (like overhead, labor and inventory) so they can accurately forecast things like your annual budget.
• Strategic Tax Planning: They can help you figure out how to restructure your business for tax purposes (if you need to) and talk through what effect buying or selling business assets could have on your tax situation.
• Performance Analysis: They can look at whether you’ve got enough cash on hand, how much debt you’re carrying (hopefully none!), and how much profit you’re making—then flag what’s off. With that insight, they can advise you on scaling your business and where to spend or save right now.

Tax Compliance and Reporting

A great tax accountant is kind of a numbers nerd with a cape (and superpowers in math). They’re laser focused on keeping your financial records not only clean but complete—so you’re not breaking any federal, state or local laws. They make sure your books can stand up to a professional review at a moment’s notice. Here’s the breakdown:

• Financial Statement Preparation: They turn your financial records into balance sheets, income statements (profit and loss), and cash flow statements.
• Regulatory and Tax Compliance: They make sure that your federal, state, sales and payroll tax returns are accurate and that your business isn’t doing anything financially illegal.
• Auditing and Assurance: They find problems with your tax returns before the IRS does. CPAs give you what’s legally called a “reasonable assurance” that your financial records are true and accurate, boosting credibility for your business with third parties like banks, investors, and regulatory agencies.

Financial Management and Consulting

This is where your small-business tax accountant acts like a strategic copilot for your business. They can help you:

• Decide when (or if) you should structure your business as an S-Corp to save on taxes
• Keep your cash flow steady and your quarterly taxes on track so you’re not writing a big tax check in April
• Figure out what it actually costs to run your business—and whether you’re making money on it
• Decide whether your workers should be employees or 1099 contractors, and what that means for your taxes

Forensic Accounting

A forensic accountant uses accounting, auditing, and investigative skills to find what’s missing. Not only do they dig into the books to help you prevent or discover fraud or embezzlement, they can help uncover off-the-books data, unreported income, and weirder stuff like phantom vendors. The whole point is to make sure your business is healthy (and honest!).

Payroll Administration and Oversight

Getting payroll wrong doesn’t just break trust with your team. It can trigger IRS penalties. And while a payroll solution provider (like Gusto or Paychex) can handle the execution side of your payroll tasks, a CPA goes a lot further to provide oversight and guidance. Translation: They catch payroll mistakes before the IRS does.

Quarterly and Annual Tax Filing

Most small businesses are required to file quarterly taxes, and if you’re not careful, those deadlines can sneak up on you. A tax accountant who’s on top of things will keep you on track so you won’t get in trouble with Uncle Sam for missing filing deadlines.

With all the specialties that tax accountants get into, you can imagine there are different credentials floating around. Let’s dig into that now.

What’s the Difference Between a CPA, EA, and Tax Attorney?

A CPA is a financial expert licensed at the state level. An EA is licensed by the IRS and specializes in taxes. A tax attorney holds a degree in law and is licensed by the state bar association (this is who you call if you have to go to court for a tax problem). Only a tax attorney can provide attorney-client privilege—the government can subpoena records from a CPA or EA.

 

The Differences Between CPAs, EAs and Tax Attorneys

Credential	What It Means	Best For
CPA (Certified Public Accountant)	They’re a licensed accountant who’s passed the Uniform CPA Exam and meets their state’s education and experience requirements. CPAs must complete ongoing continuing education to keep their license active.	Small businesses that need year-round financial support—bookkeeping, payroll, financial statements, and tax planning that goes beyond filing
EA (Enrolled Agent)	They’re a tax specialist licensed directly by the IRS who has either passed a comprehensive three-part IRS exam or worked for the IRS for at least five years. EAs specialize in taxes.	Business owners with complex tax situations, IRS issues, back taxes, or audits—EAs can represent you before the IRS in all 50 states
Tax Attorney	They’re a lawyer who specializes in tax law. They must have passed the bar exam and typically hold an advanced tax law degree.	IRS litigation, tax fraud investigations, business restructuring, or estate planning where legal strategy is required

Note: All three of the above pros can hold a PTIN and represent you before the IRS, but only a tax attorney can try your case in federal court.

What Makes a Tax Accountant the Best for Your Small Business?

The best tax accountants have verifiable credentials, like a PTIN, and have a proven track record with other small businesses (and will provide references). They’re proactive and available year-round, can represent you with the IRS if you’re audited, and are transparent about their fees.

That may seem like a high bar, but think of it this way: Do you want to play fast and loose by hiring someone less qualified to deal with the IRS? (We’re going to go ahead and say no. No, you don’t.)

How to Find the Right Tax Accountant for Your Small Business

The right tax accountant for your small business is credentialed, experienced, clear about fees, and ready to represent you if the IRS comes calling. Here’s how to find that person in six steps.

1. Make a list of candidates.

Don’t just hire the first accountant you meet. Instead, find three or four accountants with potential before finalizing your decision. You can get referrals from family, friends and coworkers, or check with your state or national associations to find more candidates to interview during your search.

The best place to start is with a RamseyTrusted^® tax pro (we can help you find one in just a few minutes). These are the only tax pros trusted by the Ramsey team, and they are mentored by our coaches to make sure they hold to our high standards.

2. Look for the right credentials.

Look for an accountant who is a CPA, an EA, or a licensed tax attorney.

A CPA has passed the Uniform CPA Exam and is licensed by the state. CPAs also have to fulfill continuing education requirements to keep their licenses active. Both CPAs and EAs can sign returns and represent any client before the IRS for audits, collections, and appeals.² If they’re going to prepare your taxes, they absolutely must have a PTIN.

3. Meet them in person—and bring backup. 

This may sound a little old fashioned, but it’s always a good idea to meet face-to-face with the person who will be handling your money. (Okay, now that we see it written down, it’s a no-brainer.)

Listen, you’re the one who’s going to pay for it if something goes wrong, so make sure you feel like you can trust them (if a prospect is weird about meeting in person, move on). But even better, go to the meeting with someone whose judgment you trust.

For example, Dave Ramsey learned a long time ago that his wife, Sharon, makes a huge difference in meetings like this. If she gets a bad feeeeeling (definitely read this in a southern drawl), Dave doesn’t hire that person. Dave says, “Every time I go against her feeeeling it costs me at least $10,000.” If you don’t have a spouse, take a trusted friend or a mentor with you for an unbiased opinion.

Ask the candidate questions like how long they’ve been in the tax business. You want an accountant who’s been in business at least two years. Also ask if there are any particular tax issues they specialize in. For example, if the whole reason you’re looking for an accountant is because you’re about to be audited, make sure you get someone who has experience with audits—and can’t be bullied by the IRS.

4. Make sure they e-file.

The IRS requires tax preparers who expect to file 11 or more returns during any given calendar year to file those returns electronically.³ If your preparer doesn’t e-file, it’s a good bet they aren’t doing much business as a tax accountant…which says a lot.

5. Compare their costs.

Every accountant has a different fee structure, so make sure you’re clear about how they’ll charge you for their services. Some might charge based on how complex your return is or the type of tax services you need for your business. Others could just charge a flat fee for every tax form you need to file. However they make money, you need to understand what you’re paying for and why.

6. Get a pro who has your back.

If something goes wrong with your small-business taxes, having a tax professional in your corner is going to make all the difference—especially with the IRS. You’ll also want to make sure your accountant is available outside of tax season if you need their advice. Hello, quarterly tax help.

What Questions Should You Ask Your Tax Accountant?

Here are a few questions you should ask your accountant prospects:

• Who will I be working with? If you’re cool spending time on hold (and listening to that terrible music), maybe it’s no big deal for you to work with a bigger firm that outsources its work. But if you want a real human to pick up the phone when you call, make sure they can provide that level of service for you.
• How long have you been practicing? Like we said, two years is the minimum. 
• Who will I be working with? What’s their team size, what are their qualifications, and what’s their communication style (email, text, phone only)?
• What are your fees—and can I get that in writing? It’d be super weird to find an accountant who refused to provide a written estimate, but stranger things have happened. 
• Can you represent me in front of the IRS? If you don’t understand what their license allows them to do for you, ask clarifying questions until you do.
• Are you available year-round? If it’s a once-and-done tax return shop, it’s probably not a great choice for your small-business accounting needs. 
• May I speak with some of your other small-business clients? There’s nobody better to ask than somebody who’s actually worked with them.

 

Why Does Your Small Business Need a Tax Accountant?

Because you’d much rather focus on running your business than going cross-eyed looking at spreadsheets, frankly. Also, we’re betting you don’t have the time or energy to keep track of changes to the tax code, sift through receipts, and figure out which business expenses actually count as deductions.

Your customers are beating down your door because you’re the expert at providing the services they need and solving their problems. It only makes sense that you would also turn to an expert for help with your small-business taxes.

Find a Great Tax Accountant for Your Small Business Today

If you had to count the hours you lose keeping the books (and the hours you spend stressing over your small-business taxes) how many hours would that be? And what might happen if you could spend that time growing your business instead?

Our small-business tax pros can take tax stress off your plate so you can focus on what matters most: running your small business like a rock star.