For Home Inspectors: How to Find the Right Tax Accountant


by Jeff Cohen, Esq., CPA
InterNACHI® Tax Counsel

 

A good tax preparer can be a year-round advisor who can help guide your business through potential tax pitfalls.  If you are looking to hire a tax preparer for this upcoming tax season, there are several items to consider.   

Here are some key questions to ask before you hire a tax preparer:

1.  What are your qualifications?

There are different types of professionals who prepare tax returns, and based on your needs, one may be better than another.  Not all accountants who prepare tax returns have a professional designation, but these are the typical designations that you will see:

  • Enrolled Agent (EA):  An EA is a person who has earned the privilege of practicing before the Internal Revenue Service (IRS) by passing a three-part IRS test, or through experience as a former IRS employee.

  • Certified Public Accountant (CPA):  A CPA undergoes a more rigorous certification process and is certified by the state after passing an exam.  CPAs can have different areas of practice, so you want to make sure you choose one that specializes in taxes.

  • JD:  A JD is a law degree, called a juris doctor.  An LLM is a Masters in Law, which can be in taxation or another area of law.  Most tax attorneys have an LLM in taxation.  Not all tax attorneys prepare tax returns, so if you go this route, you’ll want to make sure you pick an attorney who does.  

2.  What types of businesses do you work with? 

It’s very helpful to have a tax preparer who understands your industry.  A CPA who provides services to other home inspectors will be aware of issues unique to the home inspection industry.   The best source for tax preparers specializing in your industry is to ask other home inspectors who they use.   


3.  Are you available to answer questions throughout the tax year? 

It is crucial to find a tax preparer who can answer your questions during the tax year.  That way, you can get good advice before taking actions that may have tax consequences.  Think twice before working with someone who is going to be available to you only to prepare taxes once the tax year is over.


4.  Who will I be working with?

Depending on the size of the firm you choose, your work may be delegated to a junior staff member.  It is helpful to know up front who will be your main point of contact at the firm.   It is also good to find out what the usual response time is for any questions you may have. 


5.  What is your fee structure?

Some tax preparers will charge by the hour, while others charge a flat fee based on the type of tax return being prepared.  It is always a good idea to understand the billing structure before you start working with a tax preparer.  Be sure to ask for an estimate of what you will be charged so that there are no surprises.  Most professionals can provide an estimate based on your prior year’s tax returns. 


Regardless of the size of your home inspection business, there are many moving parts on the business side that are important to get right. So, be sure to take the time you need to find the most qualified professionals so you can concentrate on providing the best inspection services possible.

For more information, email legal@internachi.org or contact the author directly at:

Jeffrey D. Cohen, Esq., CPA
Tax Counsel
The Cohen Law Firm, PC
Legal, Tax & Business Advisors
6610 Gunpark Drive, Suite 202
Boulder, CO  80301
Phone:  (303) 733-0103
Fax:  (303) 733-0104
jeff@cohenadvisors.net