How to Find the Best Tax Professional for Your Business

Working with an expert can save you from learning from your own mistakes. And having a tax advisor is a smart choice that can lead to a lot of benefits for your business. Tax advisors aren’t just for tax preparation. They can provide guidance on multiple areas of your business and help steer you towards optimum financial health.  However, it’s important to select a tax professional who is a good fit for you and your company. Here are some tips for finding the best tax advisor for your business.

Do You Need a Tax Professional?

Everyone has a unique tax situation and a unique perspective on what they need. Some clients want to be 100% hands-off, others want to learn deeply from an expert. In general, people value creating a long-term partner who can provide feedback on their financial health. Someone who doesn’t judge their finances, but works to understand their goals and desires.

For example, we have clients that sign up, provide their information and only want to hear from us when we complete their tax return. These clients know what they value most: delegation. Then, we have clients who want to walk through their information, talk through mistakes they want to avoid and get feedback on where they are. The balance that you must strike in hiring a tax professional or accountant is, “do I want to learn or delegate?”. Everyone has their own views on what’s more important, but we recommend clients to seek a bit of both. 

Are My Taxes Complicated? 

Some may be simple and straightforward, while others may be more complicated. It’s often the questions you’re not asking that create problems down the road when symptoms of bad financial habits or unaddressed tax issues become very apparent.  

best tax professioanl
Image Credit: Wisebread, https://bit.ly/2XxAkl9

These issues can be financial. Taking on a business with too much leverage can create burdensome debt obligations. If not careful, these obligations can hamper growth, as we’ve seen with many upstarts who struggle to service debt based on overly positive projections. 

These issues can also be structural. We’ve advised partners who took an old LLC in their Airbnb property management business, only to learn that the partner legally contributed his assets and business income to the new business and to the new partner. When you’re in the ring of business, you don’t have time to do the research. In these situations, it makes sense to rely on people who are in the thick of these issues and have experience advising clients on very similar matters. Chances are your challenges are new for you, but not for seasoned finance, tax, or legal professional who is familiar with your business. 

Navigating the Tax Code

Taxes are complex. On top of financing your business and having the proper structure, navigating the complex landscape that is the tax code is extremely challenging. As a tax professional myself, I can find myself contemplating which interpretation of the Internal Revenue Code is most applicable and can be safely defended for my clients’ businesses. The code was not written with short-term home-sharing or car sharing in mind. So often, a few of us will string together a series of emails on a particular issue, for example, the Schedule C versus E debate for home-sharing and triangulate our views based on different treasury regulations. Coupled with other questions, figuring out how to handle tax — not just a year-end but throughout the year — can be daunting. 

Do you have questions regarding your tax compliance? Do you conduct business in other states and cities? Are you taking advantage of all of the possible tax deductions available to you? Do you have multiple streams of income? If you answered yes to any of these questions, it may be in your best interest to work with someone who can make sure you have the right to-do list. Knowing what you should care about (and not care about) is a powerful first step in handling your finances. 

best tax professional
Image Credit: Butler Chartered, https://bit.ly/2xD9mJe

Do I Need a Tax Expert?

Working with the right tax advisor should be very beneficial for several reasons. For starters, you can save money on your taxes. Those are savings you can measure in dollars. A tax advisor can help you with a comprehensive tax planning strategy, which can help you save money by timing purchases, timing income, leveraging deductions, and incorporating to lower your tax liability.

A tax advisor can also help save you time on your taxes. They specialize in the tax code, so you don’t have to. This saves you time learning all the specific tax regulations that pertain to your business, and it also ensures that your taxes will be filed correctly and on time, warding off excessive unnecessary fines and any extra scrutiny from the IRS. In our experience, saving money and time when it comes to taxes is a proven way to reduce stress over time. Even if you don’t get the answer you want from us, knowing the truth about taxes will benefit you over a lifetime of paying them, no matter what tax bracket you’re in. 

Tax Professional vs. Accounting Specialist: Understanding the difference

A tax professional varies from an accounting specialist. While a professional may choose to specialize in both, not all tax professionals or accounting specialists are the same. Some tax professionals choose to focus on tax preparation, while some focus on tax planning and tax compliance. Likewise, some accounting specialists focus on bookkeeping services and don’t handle tax preparation or know the nuances around the code. Just because someone is a CPA, doesn’t necessarily mean they know the tax code.

The CPA exam is heavily focused on financial audits with only one section of the exam focused on federal tax. Be sure to understand your advisors background. We’ve had unfortunate circumstances where we have had to amend multiple years of returns because a client assumed that their bookkeeper was able to handle all things finance. Not only were the taxes incorrect, but their accountant failed to warn them about certain tax requirements around owner compensation that cost the owner way more than going to a tax specialist. 

best tax professional

What to Consider When Choosing a Tax Pro

There’s nothing wrong with tax professionals who do both but always take into account your tax advisor’s professional strengths. Look for advisors with up-front communication who explains everything clearly. Always ask your CPA or tax advisor questions like these:

  • Does your firm primarily work in accounting or bookkeeping, or do they specialize in taxes?
  • How much experience do you have in compliance (filing returns) versus consulting?

These questions will give you a better idea of an accounts tax experience. They also will tell you how well they know the tax code.

A firm that primarily does compliance work might not be able to offer effective strategic guidance. However, an experienced consultant can help you develop strategies for lowering your taxes.

The best firms have expertise in both areas. Ideally, you want a firm that has both dedicated bookkeepers and tax professionals on their staff. At Shared Economy Tax, our team includes compliance and consulting specialists, so we can help you with every aspect of your finances.

For business owners, this type of balance is a home run. Well-rounded teams give you the best of both worlds. However, beware of one-person firms who claim to understand the entire picture. As the old adage goes, a jack of all trades is an ace of none. One person with a wide range of expertise can’t match the in-depth knowledge that a team of specialized professional can provide. 

Choosing the Best Tax Professional for Your Sharing Economy Business

When trying to find the best tax professional for your business, it is important to make sure you have a clear understanding of what you want and need from your professional. Are you looking for someone to handle both your tax preparation and your accounting processes? What about tax planning and business planning? Outline your goals first so that you can ask the right questions when hiring a tax professional for your business. As a general rule of thumb, look for a tax advisor who specializes in your field and knows your industry. 

Sharing Economy tax specialists understand the tax regulations that affect your business the most. These experts can help you strategize, plan, and save for your taxes. 

 Each business has its own unique tax challenges. Here’s what you can expect, depending on your business.

Freelancers

Freelance professionals should plan around their self-employment taxes on earnings. Some of their priorities include maximizing deductions, making timely payments on estimated taxes, and structuring their business to minimize their tax bill. 

Airbnb Host

Hosts need to ensure they’re correctly splitting their business and personal expenses.  Our tax specialist can also help you take advantage of every deduction available. Many accountants miss these deductions. For example, you can write off depreciation on your property, paid subscriptions, traveling to “research” other properties, and more.

Turo Fleet Owner

Turo hosts need to log all their trips and miles. However, their logs need to correctly represent actual business use.  Accurate logging helps you stay out of trouble and take full advantage of depreciation. 

More Tax Tips

And these are just some quick tips. Ultimately, the real value for any business operator is in learning from others’ mistakes. You can learn it on your own, but it will take time and probably involve some aggravation. Instead, you should be asking, “what would a similar business with twice my revenues doing?”

That’s why you’re better off working with a firm that specializes in your industry. If you’re a Sharing Economy entrepreneur, you want a tax pro that has worked with lots of successful clients on Airbnb, Turo, and Upwork. Tax pros that are familiar with your industry understand your business’s unique struggles. It’s one of the best reasons to work with a firm that specializes in your niche.

Get Specialized Tax Help Now

The pros at Shared Economy Tax specialize in serving Sharing Economy businesses. Contact one of our tax experts today and you’ll notice the difference right away. We understand your business and, most importantly, we understand you. You can also subscribe to our newsletter for free tax tips and much more. 

get started

Related Articles

Tax Preparation For Peer-To-Peer Car Sharing Turo & Getaround

Selecting an App to Track Business Time

Should I Be Paying Quarterly Taxes for My Business?

Leave a Reply