On the hunt for a new accountant? Not sure what to ask your current accountant? Here are some basic questions to help you out.
1. What are you professional credentials/experience?
Your accountant can be an enrolled agent, certified public accountant (CPA), or even an attorney. Each brings a certain level of skills and expertise so be sure you are clear as to the qualifications of your tax preparer.
2. What services do you provide?
Tax return preparation, bookkeeping, payroll services? You may require some or all of these services depending on your unique needs. You should also inquire as to whether the accountant has worked with an individual or business with similar needs.
3. Will you represent me in an audit?
A reputable tax preparer will sign the returns and stand behind their work. Avoid any tax preparer or accountant who refuses to sign a return they prepared. Never sign a blank tax form.
4. What records do I need to keep and for how long?
Keep all documents showing your income, deductions, and credits. These include W2's, 1099's, invoices, payments, and any other proof of a deduction or credit. You should keep all documents for at least 3 years after you've filed your tax return.
5. Do I need to make estimated tax payments?
Yes, if you expect to owe $1,000 or more on your tax return. Estimated tax payments are especially important if your receive 1099 income. Estimated tax payments can be made online through the IRS EFTPS system.
If you operate your own business, here are some important questions for your accountant.
1. Can I deduct the business use of my home?
In order to claim the deduction, the use of the home must be regular and exclusive and it must be your principal place of business. Random uses of your home do not qualify for the deduction.
2. Can I claim a deduction for mileage?
In order to deduct mileage, the use of the car must be for business and does not include commuting to and from work. The IRS allows actual expenses such as gas, oil, repairs, and insurance, or a standard mileage rate, which is currently $0.575 per mile.
3. Can I deduct the cost of work clothes?
The cost of clothing can be deductible if you must wear them as a condition of employment, and they are not suitable for everyday wear. You can deduct the cost of protective clothing required by your job.
4. How do I recover the costs of business assets?
IRS Section 179 allows you to depreciate the value of office furniture, buildings, machinery, and equipment over the life of the asset.