Last Updated: November 4, 2026
Quick Summary
Before hiring an accountant, ask about credentials and licenses, how they charge, and what services are included in the engagement. Confirm whether they are a CPA, an Enrolled Agent, or an uncredentialed tax preparer, and get the fee model in writing before any work begins.
- Ask whether the accountant is a CPA, an Enrolled Agent, or holds no formal credential.
- Get the fee model in writing before any work begins.
- Confirm whether the engagement includes quarterly estimates and IRS notice responses.
- Walk away if a preparer promises a specific refund before reviewing your documents.
- Ask for client references and actually call one before you sign.
Table of Contents
- Why the Right Questions Save You Money and Stress
- 1. What Credentials and Licenses Do You Hold?
- 2. How Do You Charge: Hourly, Fixed Fee, or Percentage?
- 3. What Scope of Services Do You Offer?
- 4. Questions to Ask a Tax Accountant for Small Business Owners
- 5. What Tax Preparation for Self-Employed Individuals Do You Provide?
- 6. How Do You Communicate and Share Documents?
- 7. Red Flags to Watch For Before You Sign
- The Bottom Line on Hiring an Accountant
- Frequently Asked Questions
Why the Right Questions Save You Money and Stress
Hiring an accountant is one of the few business decisions that touches every part of your finances, from your tax liability to your cash flow to how you sleep at night. The IRS offers free filing options for qualifying taxpayers, but once your situation involves self-employment income, rental property, or a growing business, a professional may be worth considering. The trouble is that most people choose an accountant the way they choose a dentist: someone recommends one, the office answers the phone, and they never ask a single hard question.
That silence is expensive. At Life and Taxes with Kelly, we tell every prospective client the same thing: an accountant who cannot answer basic questions about credentials, fees, and scope before you sign is an accountant who will surprise you later. Below are the 11 questions to ask before hiring an accountant, along with the answers that should make you comfortable and the ones that should send you looking elsewhere.
1. What Credentials and Licenses Do You Hold?
Start with the paperwork, because credentials tell you what a person is legally allowed to do on your behalf. A Certified Public Accountant (CPA) is licensed by a state board. An Enrolled Agent (EA) is federally licensed by the IRS specifically for tax work. A tax preparer may hold no formal credential at all, which is legal but limits what they can do when the IRS comes calling.
Ask directly: Are you a CPA, an EA, or neither? Do you hold a Preparer Tax Identification Number, which the IRS requires for anyone who prepares returns for compensation? The IRS directory of federal tax return preparers explains the difference between these designations and why it matters. If the answer is vague, treat it as a no.
2. How Do You Charge: Hourly, Fixed Fee, or Percentage?
Fee structure is where good intentions and bad surprises collide. Most accountants bill one of three ways: an hourly rate, a fixed fee per return or engagement, or a percentage of refund or savings. I recommend asking for the model in writing before any work begins.
A fixed fee gives you budget certainty. Hourly billing is common for advisory work and complex returns but rewards slow processes. Percentage-of-refund pricing deserves real scrutiny, because it can create an incentive to chase a bigger refund rather than the most accurate return. The FTC’s guidance on professional services is a useful reminder that clear, upfront pricing is an expectation, not a favor.
Watch out: if a preparer quotes a fee before looking at a single document, that number will almost certainly change.
3. What Scope of Services Do You Offer?
Scope answers a simple question: what exactly am I paying for? Some accountants prepare returns and nothing else. Others handle bookkeeping, payroll, financial statements, and year-round tax planning. Neither is wrong, but you need to know which one you are hiring.
Ask whether the engagement includes quarterly estimated tax calculations, IRS notice responses, and planning conversations during the year, or just the annual filing. If your business needs payroll services or monthly bookkeeping, confirm the firm provides them rather than assuming. A common mistake is hiring a tax preparer for a bookkeeping problem, then discovering in April that the books were never cleaned up.
4. Questions to Ask a Tax Accountant for Small Business Owners
Small business owners need a different conversation than W-2 employees. The questions to ask a tax accountant for small business should cover entity structure, deductions, payroll compliance, and how the accountant handles growth. Ask how they decide between an S corporation and an LLC, how they document deductions, and whether they will review your books quarterly rather than annually.
Ask about industry experience too. An accountant who works with restaurants all day will spot inventory and tip-credit issues that a generalist misses. Business scalability matters as well: will this firm still serve you when you hire your fifth employee or open a second location? If the answer is no, you are renting expertise rather than building a relationship.
5. What Tax Preparation for Self-Employed Individuals Do You Provide?
Self-employed taxpayers face a specific set of challenges: quarterly estimated payments, self-employment tax, mileage and home office documentation, and the constant blur between personal and business spending. Tax preparation for self-employed individuals should include more than typing numbers into software. Ask whether the accountant will help you set up a system for tracking expenses during the year, calculate safe-harbor estimated payments, and reconcile business and personal accounts.
Get Started with Your Taxes → →
If you are behind on filings, say so in the first conversation. The IRS guidance on filing past-due returns explains that filing late is almost always better than not filing at all, and a good accountant will have a clear process for catching up without judgment.
6. How Do You Communicate and Share Documents?
Communication frequency is the quiet dealbreaker. Ask how the accountant prefers to communicate, how quickly they typically respond, and whether you will work with the same person each year or get handed off to whoever is available. If you live far from the office, confirm that video calls and a secure client portal are standard, not an afterthought.
Software proficiency belongs here too. A modern firm works in cloud accounting tools, shares documents through an encrypted portal, and can pull reports without asking you to mail a shoebox of receipts. Ask which platform they use for document sharing and whether your records stay accessible after the engagement ends.
| Fee Model | Best For | What to Confirm |
|---|---|---|
| Hourly | Complex returns, advisory work | Estimated hours and billing increments |
| Fixed fee | Straightforward annual filings | What is included and what triggers extra charges |
| Percentage of refund | Rarely advisable | Whether the fee changes with refund size |
| Monthly retainer | Ongoing bookkeeping and planning | Scope, response times, and cancellation terms |
7. Red Flags to Watch For Before You Sign
Some warning signs are obvious and some are subtle. Walk away if an accountant promises a specific refund amount before reviewing your documents, refuses to sign your return as the preparer, or cannot explain their fees in plain language. The IRS requires paid preparers to sign returns and include their Preparer Tax Identification Number, and a preparer who dodges that requirement is a liability.
Other red flags: no written engagement letter, no secure document portal, pressure to file immediately, or an office that cannot tell you who will actually handle your file. Ask for client references and actually call one. A firm that cannot produce a single satisfied client for a prospective client to speak with is telling you something.
Once you have vetted a few accountants and found one you trust, the next step is simple: start the process and get your questions answered directly.
The Bottom Line on Hiring an Accountant
The right accountant does more than file a return. They explain the tax code in language you understand, flag deductions you would have missed, keep you compliant as your income grows, and answer the phone when an IRS letter shows up. The 11 questions above are not a formality; they are how you separate a real professional from a warm body with tax software.
Tax season doesn’t have to be confusing. At Life and Taxes with Kelly, I’m here to help you understand your options, get organized, and file with confidence. We offer personalized tax guidance, small business and self-employed tax preparation, IRS notice assistance, and prior-year return support. Visit our website or the client portal to get started.
Frequently Asked Questions
What questions should I ask an accountant before hiring them?
Start with credentials and licenses, then ask how they charge (hourly, fixed fee, or percentage), what services are included, and whether they have experience with IRS audits. Ask for client references and confirm how often you will communicate. A good accountant will answer these clearly and welcome a follow-up conversation before you sign anything.
What is the difference between a tax preparer and a CPA?
A CPA is a state-licensed professional. A tax preparer may hold no license at all, though many hold IRS Preparer Tax Identification Numbers and must follow IRS preparer standards. For complex situations like business returns or audit representation, ask about credentials and confirm they match your needs.
Should I ask about an accountant’s experience with IRS audits?
Yes. Ask whether they have handled IRS notices and audits similar to yours, what the process looks like, and how they communicate with the IRS on your behalf. Experience with audit support matters if you have back taxes, unfiled returns, or a notice you do not understand. Ask them to walk you through a typical timeline so you know what to expect.
How do I know if an accountant is a good fit for my small business?
Ask about their experience with your industry, the software they use, and whether they offer tax planning beyond filing. Request references from similar-sized businesses. A good fit is someone who explains things in plain language, responds to your questions promptly, and offers a clear fee structure before you commit.
How should I ask about an accountant’s fee structure?
Ask directly: ‘How do you charge for a return like mine, and what is included?’ Request a written estimate or engagement letter that spells out hourly rates, fixed fees, or percentage-based pricing. Confirm whether fees change if your situation is more complex than expected. Comparing written estimates from two or three accountants helps you avoid surprise bills.
