Two Parts to Finding the Tax Professional Right for You

Unless you’re new here you already know that I advise against preparing your own indie tax return or using tax preparation software. I recommend you hire an indie-savvy tax professional. Easier said than done. I know.

The difficulty in finding an indie-savvy tax return preparer might seem puzzling at first, since a considerable share of tax pros are themselves self-employed. But their self-employment is different – one might call it prosaic. For instance, Sammy Segar, CPA, will rent a DVD for amusement at the end of a tough day. It does not register with him that an artist, a writer or a musician might have a valid professional reason for buying or renting a DVD. Sammy would never imagine that such an expense could be a business deduction. Sammy’s creativity is confined to the search for tax loopholes for corporations and executives, and that’s more a matter of rote than of innovation. Most tax pros don’t like to do tax returns for indies because the rules and regulations need to be analyzed and interpreted to fit unique indie situations. And then of course, Sammy doesn’t like to deal with the various personalities of the IT consultant, the plumber, the psychologist, the inventor, the landscaper, the dog trainer. He’d rather crunch numbers for the cubicle-dwelling corporate dullard who’s dreaming about his retirement now only 35 years off.

I’m having a bit of fun with my fellow tax pros, however, the point is to help you understand and to help you make the right choice. Think about accountants as you think about doctors. They specialize! You would not use an ophthalmologist for treating breast cancer. Nor would you seek out an orthopedic surgeon for a head cold. Don’t use a corporate accountant to handle your indie tax situation. There is nothing in the title CPA –certified public accountant – that means someone has prepared sole proprietorship tax returns. While the return preparer at the tax franchise around the corner may have been working with indies for 20 years. You need to find out.


To help you in your search, think of it in two parts.

Part 1: Get some recommendations.
· Ask colleagues whom they use.
· If you belong to a professional organization, combine efforts with other members to find someone.
· Call your local Small Business Development Center or Small Business Association . Both are often located at a community college Try your local chapter of SCORE.
· Ask a tax franchise if they have a preparer who specializes in self-employeds.

Part 2: Decide if the recommended pro is right for you.
· Ask the tax pro to speak to your professional organization.
· Ask how many indies she has as clients. Ask for a reference.
· Use your instincts and your talent. Size up the pro the same way you would a new client.
· Talk about your work. Does she ask questions about your work? Does she want to know more about what you do?
· Always, no matter where the recommendation comes from, ask questions of the pro before you engage him or her. Especially ask questions you know the answer to -- that'll give you a good idea where the pro is coming from.
· Do you understand the answer? If you really do you’ll be able to explain it to another indie. Try it.
· Get some education yourself on the tax laws and regs as they apply to self-employeds. Your best defense is to learn as much as you can. You might want to start by reading, "Is it a deductible business expense?" or Taxes: Which ones and how much do I pay? Both on my website. Or about LLC vs incorporating .

For a better understanding of tax and recordkeeping basics check out my book, Self-employed Tax Solutions.

For more information about how to Pick a Pro, look at these bIog entries:
It's tax time so ... beware of bad advice from the real-life Sammy Segar, CPA
Clueless Professional Accountant (CPA) Says You Can’t Deduct a Gift to Your Mother
Pick a Tax Professional: Experience or Price
Tax Pro's Fees for Tax Return Preparation
Don’t Do Your Own Tax Return