Hacker News Reader

Comment by ineedtosleep | Hacker News Reader

> Get an accountant.

This is where I specifically fumble on. From all the research I've tried to do online, I'm still not sure how to look for an accountant. Are there different types that specialise in the work that freelancers/contractors do? Is there a specific title that I should research? etc.

View on HN

Accountants are like mechanics. You are only going to find a good one by word of mouth... and even then you have check to make sure that he fits your business. You should approach an accountant like a job candidate; ask questions about his business practices and those that pertain to your business.

I found my accountant through a network of co-workers that all have the same type of freelancing business (single founder; very few clients). I know he makes a lot of money doing my taxes, but he ends up saving me more money than what he's charging me and keeps me worry-free with regard to the CRA (IRS; US-equivalent).

If you are in the Vancouver area, I can recommend a good accountant that works with small/micro businesses. Hit me up on Twitter.

One of the main differences in accountants is risk tolerance. Freelancers have considerable leeway in the way they structure their taxable income and accordingly can have considerable variation in their risk of an audit. Make sure you interview a couple accountants and try to find an accountant whose risk tolerance matches your own. Don't expect that a big firm will be more conservative than a small one--the opposite is often the case.

I would suggest finding someone who's trusted in working with local small businesses - probably themselves a small local shop with a few accountants - ask your hardware store owner, coffee shop owner, etc. If you are within a taxing municipality it can be helpful to have someone who knows the local ins and outs.

Generally speaking, the tax implications of being a freelancer are less complicated than small scale retail (e.g. no inventory).

But note that the tax implications of being a freelancer are way more complicated than those of being a W2 worker.

I learned this lesson the hard way several years ago.

I can't stress enough the importance of making sure wherever you go isn't a place that just rubber-stamps W2 returns.

I made the mistake of going to H&R Block during the year I was 1099'ing, and aside from the person doing my return having to go ask someone for guidance at every line item on the forms, I ended up getting a letter in the mail from the state saying that they'd calculated I overpaid by a few grand.

I can't even fathom how bad of a job they must have done, if the state was the one to inform me that I'd given them too much money.

My account finding tip would be to avoid focusing on the amount that they charge, but get references and find out how much money they saved their clients. Cheap accountants generally provide less value in my experience.

Reply on news.ycombinator.com