Episode 02: What to Look for When Hiring a Tax Accountant

Yes. Even if your business is part-time, earning income from it means you’re responsible for reporting that income accurately to the IRS (and your state, if applicable). Business tax filings involve more complexity than personal returns, especially when it comes to deductions, expense tracking, and quarterly tax estimates. A qualified accountant can help you stay compliant, avoid costly mistakes, and make sure you’re taking advantage of all eligible write-offs, even in the early stages.

Not necessarily. Most accountants today can serve clients anywhere in the U.S., using secure cloud-based software and e-signature tools to exchange documents. They are also able to research and apply the tax laws of any state. The main exception is if your state has highly unique tax rules or you prefer to meet face-to-face. In most cases, choosing the right expertise is more important than geographic location.

You don’t need a CPA to get expert tax help. Enrolled Agents are federally licensed by the IRS and specialize exclusively in taxation, which means their training is laser-focused on helping you file accurately and minimize your tax liability. CPAs are highly trained as well but often have broader backgrounds in corporate accounting, auditing, or financial management. For most small business owners, especially in the online space, either credential can be a great choice, but the professional’s experience and service approach often matter more.

No. Bookkeeping and tax preparation are related but require different skill sets. Bookkeepers focus on keeping your financial records accurate and up to date throughout the year, while tax accountants specialize in applying tax law to those records to prepare and file returns. In many cases, separating the two roles ensures you get the highest level of service in each area. If you do choose an all-in-one provider, make sure they have dedicated staff for each function.

Your budget should grow as your business grows. In the early stages, you may only need basic annual tax filing. As your revenue and complexity increase, it becomes worthwhile to invest in professionals who offer proactive tax planning, accurate filings, and strategic advice. Factors that influence cost include the type of business entity you have, your revenue volume, how organized your records are, and whether you need ongoing support beyond tax season.

Tax preparation focuses on accurately filing your returns based on last year’s numbers. Tax planning is a proactive, year-round strategy to reduce your tax liability through legal deductions, entity structure choices, and other tactics. Growing businesses often benefit from adding tax planning to their accounting services so they can make informed decisions before year-end.

Solo accountants can provide personalized attention, but if they get sick, retire, or become unavailable, it may leave you without support. Larger firms offer stability and additional resources, but you may receive less one-on-one attention if you’re a smaller client. Many small business owners find mid-sized firms offer the best balance of expertise, service, and reliability.