How to choose a CPA for an S corporation or LLC

An LLC or an S corporation does not need a famous firm. It needs someone who will say, before they file, how owner pay, draws, and the books fit together. The expensive mistakes are ordinary: payroll that never started, distributions with no basis schedule, and a set of books the return cannot stand on.

Start with the entity you actually have

Read the IRS acceptance letter, not the operating agreement alone. A state LLC can still be taxed as a sole proprietorship, a partnership, an S corporation, or a C corporation. The CPA should be able to name which one you are from the documents, and which return that implies.

If you are thinking about an S election, ask for the deadline and the payroll consequence in the same conversation. An S corporation that pays its working owner only in distributions is a problem the return cannot quietly fix. Wages, withholding deposits, and a reasonable-compensation story are part of the engagement, not an add-on you discover in March.

Separate three jobs

Bookkeeping, the business return, and tax planning are often sold as one relationship. They are still three jobs.

• The books have to be closed: bank accounts reconciled, owner draws coded, sales tax and payroll liabilities sitting in the right accounts.
• The return reports that closed year and tracks basis, so next year’s distribution has a number behind it.
• Planning is the meeting before year-end, when an equipment purchase, a retirement contribution, or a late S election is still available.

Ask which of the three the proposal includes. A low filing fee that assumes perfect books is not a low fee if the books are six months behind.

Questions worth asking on the first call

Ask who prepares the return and who signs it. Ask whether they will compute shareholder or partner basis, and whether they will tell you before a distribution creates taxable income. Ask how they want the books delivered, and what they will not touch. A CPA who says they do not do payroll should say who does, because an S corporation owner still needs wages.

Bring the last return, a year-to-date profit and loss, a balance sheet, and a list of owners. If you do not have a balance sheet, say so. That is the cleanup, and it should be scoped before anyone quotes a filing date.

What a fit looks like

A useful CPA for this work will talk about your state, your payroll, and your software without turning the call into a lecture. They will also say what they do not do. Sales tax in a dozen states, an audit for a lender, or a cross-border owner may belong with someone else. That is a better answer than a yes that quietly leaves the hard form off the engagement.

If you are comparing listings, read the services on the profile. Business tax preparation, payroll, and bookkeeping are different lines for a reason. A profile that names the work is easier to hire than a profile that only names a city.