Although it’s possible to track your own expenses, file your own taxes, and manage your business finances yourself, you’d be surprised at how much money you can save by hiring an official, licensed accountant to advise you. There are likely many ways you’re actually spending more on taxes and fees than you need to, and an accountant will have insights on how you can save money on these necessary business expenses.
Once you’re ready to hire an accountant, here are five questions you should ask them about finances, taxes, and your freelance business.
1. What do I need to know about quarterly taxes?
Quarterly taxes are a very unique aspect of freelance finances, and it’s important to file them correctly so you don’t end up owing on your annual taxes! An accountant who has worked with freelancers and other self-employed individuals should be very familiar with the inner workings of quarterly tax payments, and can help you plan to set aside the appropriate amount each month so you’re already prepared to pay when the quarterly deadline arrives!
2. What expenses do I need to account for to stay above board?
Discuss your unique industry and business structure with your accountant. You may need insurance, a business license, or to incorporate your business, but this all depends on what kind of business you have and in what state. Although you can research various expenses and read up on different options for self-employment, an accountant will be able to tell you with confidence what you do (or don’t) need.
3. What expenses are deductible?
From full deductions that are exclusively for your business to percentage-based deductions like your phone, internet, or computer, you want to make sure you’re deducting every penny possible! Your accountant can help you sort out what qualifies as a deductible business expense and how much you can deduct from your taxes..
4. What records should I keep?
You never know when the IRS is going to come knocking, so it’s important to keep track of any and all documentation for your business and your expenses. But what specific records do you need to maintain? How should you store them? And for how far back in the history of your business do you need to keep records for? These are all excellent questions for your accountant, who will have a clear understanding of record-keeping best practices.
5. What is your preferred method of communication?
This may seem a far cry from the nitty-gritty, technical nature of the previous questions, but it’s perhaps the most important one! Throughout your business relationship, you will likely have more questions for your accountant beyond these initial ones.
You need to establish right from the get-go how you will communicate with them so you know the best way to get your questions answered in a timely fashion while respecting your accountant’s boundaries. Remember, they’re likely self-employed too and are just as in need of respect for the client-contractor relationship as you are with your own clients!
Find the Right Accountant for You
Before you can ask your accountant these key questions, you need to find an accountant! Like with any business expense, you want to be sure of a good return on your investment, so it’s important to find the right accountant for your needs before committing to working with one.
If you have a strong network of freelancing friends to network with, try asking them for recommendations. They may have an accountant they’re already working with and love, saving you a lot of time researching and meeting with potentials! You can also try posting in freelancer Facebook groups to ask for recommendations from your fellow freelancers.
Beyond networking, you can also try looking on freelancing websites like Upwork or Paro. The IRS also has a directory of tax preparers you may refer to for finding your accountant.
To learn more about finding the right accountant for you, check out our guide to finding a good CPA.
Before meeting with your potential accountant, have notes prepared on all the questions you want to ask them, especially anything that may be a determining factor in whether or not they’ll be the right fit for your business. Know your needs, know your budget, and know what you’re getting when you hire an accountant!