Taxes & Accountants Suggestions

[cesarcesar]

I run a sole-proprietor web dev company. After a few years of going at it alone, my taxes really need someone on them who knows what they are doing. I have spoken with a few accountants but am finding that many know nothing "special" about accounting for the web business.

So my questions are:

1) Can someone suggest some tips to finding a qualified accountant. What questions to ask them and such.

2) I would also like to know what type of "legal" tax tricks or deductions i should definitely be doing to make the most after taxes.

3) Any URL to great info is also appreciated.

Lets make this post great!

[PappaJohn]

I'm assuming that you're asking about US taxes. I've owned a tax accounting firm for over 30 years.

Actually, there isn't all that much that's "special" about your business - tax-wise, that is. With very few exceptions, the same tax laws, deductions and methods apply to all businesses. There are no special laws or tricks which apply to a web dev business.

The important things are:

1. The accountant is experienced in dealing with small businesses. Small businesses, in general, present their own, unique tax problems and opportunities.

2. The accountant understand the types of costs your incur. This can vary widely between types of businesses. But, frankly, this is a give and take situation for any business. No matter how long you've been dealing with a certain type of business, you can find someone with an innovative way of spending money. The point is, although you should expect your accountant to understand the costs you incur, it is also up to you to ask questions or bring up any items the accountant doesn't.

3. The accountant understand your sources of income. Similar to #2, but less variation. This is still a give and take area - always ask questions.

I've listed these in order of importance, with #1 being, far and away, the most important.

Other considerations:

No accountant worth having will ever be annoyed or frustrated with questions about your business ie: "Hey can I deduct .... ?". Even if it's not deductible, it helps the accountant understand the way you run your business. He wants to understand, it makes his job easier.

Your accountant should be accessible. You don't want someone who does this part-time, 3 months a year. Understand that most accountants will have shorter hours off season than they do during tax season, but they should still be around.

There is a fine-line between being too aggressive as an accountant and properly advising clients on the "tricks". Unfortunately, it's difficult for you to know. Similarly, there are many accountants who are too passive in representing their clients. This can come down to a gut feeling on your part, but when in doubt, ask.

It never hurts to ask for references, but keep in mind, the references you'll get will be the accountant's happiest clients.
HTH

[cesarcesar]

thanks much for the great info. i really want to be pre-pared for this venture and i think i am a little better now.

[PappaJohn]

Another thought...

Just because an accountant is a CPA, doesn't automatically mean they are the right choice for you. CPA's frequently specialize in certain areas, not necessarily small businesses and taxes.

Over the years, my firm has prepared taxes for a number of CPA's. They specialized in other areas and were smart enough to know that they didn't know enough about tax law.

Unfortunately you'll run across the CPA that thinks those initials mean that he/she knows everything. Be sure to ask - make sure he/she deals with small businesses and their taxes.