9 Essential Questions to Help You Prevent a Tax Fiasco

By: Kim Nishida


More than half of US citizens prepare their own taxes. According to the IRS, over 60% of those make some sort of mistake. Believe it or not, tax payers cost themselves an estimated $50 million annually by not claiming all of their appropriate tax credits.

Do you enjoy learning the latest tax laws? Are you organized enough to stay on top of the ever-changing forms and rules? Most people actually shut down when it comes to their taxes, playing a "don't ask, don't tell" strategy with their money. How often do you think that game plan pays off? And if you own your own business, the stakes are much higher.

Do yourself and your business a HUGE favor and delegate your tax preparation to an expert. Believe it or not, there are tax preparers who love nothing better than to find ways to save you money!

But be careful. Not all tax preparers are alike. Hire the wrong person and you run a risk of finding yourself on the bad side of the IRS. Not sure how to go about hiring the right person? Here are 9 Essential Questions to ask a prospective tax professional:

1. What are your credentials? Tax preparers usually fall into one of the following categories: certified public accountants (CPAs) who are licensed by the state, enrolled agents (EAs), who are licensed by the government, and unenrolled agents (pretty much everyone else). Be careful because many states do not have licensing requirements for tax professionals so basically anyone can call him or herself a pro.

2. How much experience do you have? The key here is to ask for experience that is relevant to your situation. A good way to find out if someone has relevant experience is to ask them to describe his or her typical client.

3. How much professional education do you get annually? Because tax codes and interpretations change every year, it's not enough just to pass a licensing exam. EAs are required to take 72 hours of continuing education every three years. But the requirements for CPAs vary by state.

4. What is your policy on returning phone calls or emails? One of the most common complaints from clients is that their tax pro won't return their calls. If communication is a priority for you, let them know your expectations.

5. What is your policy if you make a mistake? Make sure they carry Error and Omission insurance. If they make a mistake, the tax preparer should pay the penalties as well as the interest.

6. Are you available outside of the tax season? Many tax preparers work only seasonally, the first four months of the year. If you have ongoing needs because you are self-employed or own a small business, make sure you can get attention year round.

7. Can I get references from other clients? If possible, get two or more references from long-time clients. Ask them about the issues that are the most important to you and get as specific as possible. For instance, how easy is it to get an appointment or have they ever needed help with a crisis?

8. Do you have any questions for me? It's important that they ask you questions so that they have a clear picture of your situation. There is a direct correlation between how well he or she understands your needs and the quality of attention that you get.

9. How much do you charge? Tax preparers may bill by the hour, the form, or the overall return. After reviewing your previous returns and interviewing you, they should be able to give you an estimate.

As the tax season draws closer, now is the time to get into action and begin interviewing prospective team members for your business. Take your time and interview at least three different professionals. Pick the one that best matches your needs and style and feel secure in knowing that you have a partner looking out for your best interests.

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Not enough clients for your small business? Kim Nishida, author of the innovative programs, ‘Stop Wasting Time!” and “Conception to Completion” helps you realize your company's full potential. Pick-up your free “Ultimate Success Kit” while supplies last at www.readytoevolve.com

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