If freelance work is your primary form of income, managing your taxes can be highly complicated. While software like QuickBooks Self-Employed will help facilitate the process, some business owners may opt to supplement that software with an accountant that is familiar with the intricacies of taxes for the self-employed.
Here are a few simple steps to help you find an accountant for your self-employed taxes.
Determine the Type of Tax Preparer You Need
- CPAs: These are accountants that have passed qualifying state exams and received specific education and training. When choosing a CPA, make sure to find one that is experienced with individual tax returns, as not all CPAs are.
- Enrolled Agents: These are professionals licensed by the IRS via an exam or after working for the IRS for five years. An enrolled agent is only concerned with taxes, so unlike a CPA, dealing with individual tax returns is likely his or her only job. EAs may also charge less than CPAs.
Ask Other Freelancers for a Referral
If you know other freelancers, ask them how they handle their taxes. If he or she has a preferred CPA or EA, ask if they can refer you. If you don’t have anybody to ask nearby, you can also use online review sites like Yelp or organizations like the American Institute of Certified Public Accountants or the National Association of Enrolled Agents. You can also ask for a referral from your local Chamber of Commerce.
Check Their Credentials
Once you’ve found a CPA or EA, you’ll want to review his or her background via the Better Business Bureau or the IRS Office of Enrollment. You might also want to check for a Preparer Tax Identification Number (PTIN), which is a government requirement for all tax preparers.
Find Someone With Industry Experience
If you primarily freelance in a specific industry, such as banking, advertising or healthcare, it’s best to find someone who specializes in that area. Finding a tax preparer with knowledge of your industry gives you a better chance of finding any hidden deductions and avoiding pitfalls.
Make Sure They’re Comfortable Working With Your Income Level
Some tax preparers are accustomed to handling clients with high levels of income. If that’s the case, they may not understand how to deal with lower incomes. It’s best to be upfront with your preparer from the start in order to ensure he or she is the best fit for you.
Conduct Interviews With Top Candidates
It’s best to meet with your top candidates to get a feel for who he or she is; this will also allow you to develop a relationship and rapport with the accountant should you decide to do business with the candidate. It’s also a good idea to bring your previous year’s tax return with you. This can help your prospective tax preparer give you a good idea of what to expect for your current year’s filing, as well as how much they will charge you for their services.
Tax preparation can be complicated and time-consuming, and when you’re a freelancer, time is hard to come by. While TurboTax and QuickBooks will definitely help make the process simpler and less complex, it may be in the best interests of some freelancers to enlist the help of a professional for tax season. The last thing you want is to short your return or—worse—get audited.