Hiring Offshore Tax Accountants: What You Need to Know

Hiring offshore tax accounting is not just about cost efficiency. It’s about your firm’s survival. Rebecca Santiago never wanted to go offshore because she believed it was one way to support the U.S. economy.

 

When confronted with the difficulty of finding qualified and affordable talent to replace two team members who were leaving, Offshoring became their saving grace.

 

“I never wanted to offshore in a million years. I want to support the US economy by hiring locally.

 

However, I found myself in a unique position I had not been in before. I was having a hard time finding the right fit for the right price. I had been given notice by two of our part-time staff.

 

I needed to replace them with full-time positions, and I could not find people with the skillset we needed who were within our budget.”

Rebecca Santiago, the Owner of Advance Professional Accounting Service

In this article, we discuss everything you need to know to hire suitable offshore tax accountants to relieve tax season pressure in your firm and make time for things that matter outside of work.

Why More Accounting Firms Are Hiring Offshore Tax Accountants

The growth of offshore hiring is a direct result of fundamental shifts in the accounting industry, which has reduced the availability and affordability of quality accounting talent in the western markets.

 

For example, over 300,000 accountants in the U.S. (17% of the population) quit their jobs between 2020 and 2022 without a commensurate number coming into the field.

Benefits of Outsourcing Tax Preparation

• Increased Capacity During Peak Season: Offshore hiring provides flexibility in the ease and speed of hiring and deploying tax accountants.

 

Offshore tax accountants are already knowledgeable about relevant accounting standards and tax regulations, which enables them to start delivering value right away. This helps you to handle seasonal surges more conveniently.

 

• Cost Efficiency Without Sacrificing Quality: The difference between offshore tax accountants and their local counterparts lies mainly in their location, which determines the cost of living and labor.

 

Offshore tax preparers are grounded in relevant tax codes (like the IRS tax code in the U.S.), which enables them to deliver the same, if not better, quality of services as your local tax accountants.

 

• Access to Skilled Talent Trained in U.S. Tax Laws: thanks to finance and accounting outsourcing companies, offshore tax accountants are highly proficient in U.S. tax laws and can work in various tax software solutions like UltraTax, Drake, Lacerte, and CCH Axcess.

 

• Faster Turnaround Times: Time zone differences (especially in countries like India and the Philippines) allow for overnight work, where the tasks you assign in one business day can be completed by morning (U.S. time).

 

• Scalability for Firm Growth: Offshore hiring gives you the flexibility to hire and fire as quickly as you need to. With employment laws and employee benefits handled by the outsourcing company, all you have to do is evaluate available offshoring companies to hire and onboard reliable tax accountants.

 

How to Hire Offshore Employees for Your Accounting Firms (2025 Guide)

How to Find and Hire Offshore Tax Accountants

Best countries for offshore tax hiring

• India

India is one of the best countries for offshore tax accountants for U.S. and European accounting firms for several reasons.

 

• Its large talent pool comprises 400,000 chartered accountants which is equivalent to CPAs in the United States. With English as its official language, Indian accountants can communicate and collaborate comfortably with American and European partners.

 

• India’s rigorous financial and accounting syllabus produces a workforce that does not require additional training in financial and accounting principles, which saves you the trouble of teaching your offshore staff how to calculate tax credits, conduct bank reconciliation, etc.

 

• Thanks to a large and mature financial and accounting offshoring ecosystem, India’s BPO infrastructure is robust enough to address data security concerns. They are also skilled in tax software like Drake Tax, Lacerte, UltraTax CS, etc.

 

Philippines

The Philippines offers a tax accounting workforce that speaks flawless English and can handle client-facing tasks like email and chat support.

 

Tax accountants in the Philippines are also trained in U.S. tax compliance and software, enabling them to deliver quality client services using the systems you already use.

 

Their cultural affinity with the U.S. and other Western markets makes them easy to train and deploy. The Philippines is one of the most affordable offshoring destinations (after India) for accounting firms in Western markets.

 

South Africa

South Africa’s fast-growing offshore workforce is a source of quality tax professionals for accounting firms in the U.S.

 

With a time zone around 6-8 hours ahead of the U.S. East Coast, South Africa enables you to wake up to the completed versions of the tasks you assigned the previous day.

 

English is also their official language. You wouldn’t have problems collaborating with your South African tax accountants.

Qualities to look for in an offshore tax professional

• U.S. Tax Knowledge:

Providing tax services in the U.S. requires an understanding of state and local tax deduction rules, depreciation schedules, multi-state taxation, and relevant IRS tax forms (1040, 1120, 1065, etc.).

 

Find out how long the provider you’re considering has served U.S. businesses their training in U.S. tax programs, and experiences using their knowledge to serve businesses in the U.S.

 

• Proficiency in Tax Software: 

Proficiency in tax software is critical to your offshore team’s ability to use your tax software without needing to be trained. Notable options include Drake, UltraTax, ProSeries, CCH Axcess, or Lacerte.

 

To evaluate a tax service provider’s proficiency in tools like Drake Tax, UltraTax, ProSeries, and CCH Axcess, give them an anonymous project and see how well they use your tax software.

 

• Strong Communication Skills:

Communication skills are necessary for collaboration purposes. Without the ability to understand written and spoken English, it’ll be difficult for your offshore tax accountants to understand how to complement your internal team members.

 

• Attention to Detail:

As with all accounting work, tax preparation requires great attention to detail. An extra or missing digit in income figures can trigger a chain of events that result in regulatory violations and penalties.

Common Hiring Mistakes to Avoid

The following mistakes have cost other tax accounting firm owners their precious time, money, and reputation.

• Hiring Freelancers Without Due Diligence:

Due diligence helps you identify the right tax accountants suitable for your workflow and internal systems.

 

That is why offshoring companies thrive. They provide professionals vetted for competence (and reliability) and compliance with relevant labor laws, relieving you of the troubles of sourcing for competent tax accountants.

 

• Skipping the Test Project:

Talk is cheap, especially when there’s no way to verify the truth of what’s been claimed.

 

Someone can claim to be proficient in Drake tax software. Without testing their skills, it would be too late until you have committed your resources to the relationship. The same applies to every other criterion—communication, turnaround time, etc.

 

• No Security Protocols in Place:

Nothing else matters where the security of your client’s data hangs in the balance.

That is why you must verify an offshore provider’s security protocols and certifications to ensure the data you’re sending overseas doesn’t get into the wrong hands.

 

Ensure your offshoring partner uses work management systems that are ISO 27001, SOC II, GDPR, and IRS-compliant.

 

• Poor Onboarding & Communication:

While they do not need further training on the IRS tax code, your offshore tax team needs to understand your best practices to deliver client service that reflects your brand values. Effective onboarding and communication clarify that.

 

For example, communicating your standard operating procedures (SOPs) through well-documented workflow templates tells your offshore tax accountants what each stage of tax work requires them to do.

 

• Not Using a Reputable Offshoring Partner:

Offshore partner firms provide not just prequalified tax accountants, but also a secure and enabling environment for work.

 

Reliable offshore companies have facilities with controlled switches and other security systems that keep your client data from unauthorized persons.

Cost Breakdown: Is Hiring Offshore Tax Accountants Worth It?

Offshore vs. in-house tax accountants cost comparison

Category	In-House U.S. Tax Staff	Offshore Tax Accountant (India/Philippines)
Base Salary	$65,000–$90,000/year (staff level)	$20,000–$36,000/year full-time
Employer Taxes & Benefits	20–30% on top of salary	Typically included in the subscription fee
Recruitment/Training	$4,000–$9,000 per hire	Usually handled by the vendor

Pricing Models for Offshore Tax Accountants

Here are the most common pricing models in Offshore Accounting and what they entail:

• Full-Time Equivalent (FTE): a flat monthly fee for a dedicated offshore tax accountant. They’ll work as your other full-time staff (40 hours a week).
• Hourly Rate: A set hourly rate for an offshore tax accountant who works for as many hours a week or month as agreed.
• Per Return Rate: a flat rate per return prepared. This is common with outsourcing companies. The agreed amount is paid when you send the client information and the tax accountant returns the completed tax form.

 

How to Hire Offshore Employees for Your Accounting Firms (2025 Guide)

Data Protection Laws for Offshore Tax Services

U.S. Compliance Requirements

Data exchange between accounting firms in the U.S. and their offshore tax teams is subject to:

• IRC 7216 & 6713: Enacted by the U.S. Congress in 1871, IRC 7216 prohibits the disclosure or use of a taxpayer’s information for purposes other than the preparation of tax returns.

 

Section 6713 of the IRC prescribes the penalty for such violations between $1,000–$10,000 per breach or a year in prison (or both).

• FTC Safeguards Rule: Requires CPA firms to have a written information security plan (WISP) and implement information security programs like encryption, access control, multi-factor authentication (MFA), etc.

 

• GLBA (Gramm-Leach-Bliley Act): requires financial firms handling sensitive client info, like CPA firms, to ensure the protection of their clients’ data and disclose their information-sharing practices to their clients.

How to Ensure Compliance with U.S. Tax Regulations

While you can’t eliminate compliance risks in offshoring, you can minimize them by:

• Ensuring Client Consent & Disclosure: In your engagement letter, notify your clients about your use of offshore support for their tax projects. Including a signed written consent (in compliance with IRC 7216) will also protect you against client disputes in the future.

 

• Doing Vendor Due Diligence: The importance of using an offshoring provider cannot be overstated. Reliable ones have ISO 27001, SOC 2, or GDPR-compliant systems. Practices.

 

They also ensure your dedicated tax accountant undergoes thorough background checks and that the working environment has the required security certifications.

• Using Practice Management Software: Tax practice management solutions provide a secure work environment for your internal and offshore teams, especially in terms of the safety of data transfers between you and your offshore partner.

 

• Creating a Breach Response Plan: If you’ve done everything above well, you may never need this step, but it is still important for security assurance.  It clarifies the steps to take to resolve any security concern before any significant harm is done.

Managing and Collaborating with Offshore Tax Teams

Best Practices for Smooth Communication

Smooth Communication helps you build an offshore tax accounting team that meets your quality, timeliness, and compliance standards.

 

Here are some ways to achieve that:

• Set Clear Expectations from Day One

Setting clear expectations (like defining turnaround time) enables you to communicate the urgency of the tax projects you assign to your offshore team.

 

One common way to do that is by using the traffic light rules.

It allows you to communicate the urgency of tax preparation work using the traffic light colors. Red means same-day (12-hour) turnaround, yellow means 24 hours, and green means anywhere from two days to a couple of days.

 

• Establish Overlap Hours

Overlap hours will be the period you and your offshore team agree to be available for real-time discussions and collaboration.

 

For example, Elizabeth Bergen prefers to meet her offshore team in the early hours of her workday. Her previous offshore partners made her meet with them at 9 PM (hours after she had closed work), which was one of the reasons she ended the relationship.

 

“The other contractors I used in the past had me meet with them at the start of their day, which was my 9 or 10:00 PM.

One of the benefits that I’ve loved about Finsmart is that even though they still meet with me early in the morning, it is better to have the meetings at the start of my day than at the end.”

—Elizabeth Bergen, Owner of Foray Business Group

 

• Centralize Your Communication

When you communicate with your outsourced tax accountants across multiple channels (email + WhatsApp + Zoom), important information can easily slip through the cracks.

 

It’s better to use a practice or project management system that allows you to communicate within a project for a richer context.

 

• Create SOPs and Process Documentation

A well-documented system of standard operating procedures remains one of the most effective ways of teaching your offshore tax accountants, or any offshore team, your firm’s processes.

 

It saves them from guesswork by providing a frame of reference, which standardizes your work quality.

Software and Tools for Remote Tax Accounting Teams

The right software solutions will provide visibility into tax projects and workload to ensure timely and accurate service delivery.

 

Here are some categories of software you need for your offshore tax team:

• Tax Workflow Management: These tools help to assign and track the status of tax work against their due dates to ensure all tax projects are completed before their deadlines.

 

Popular options include Financial Cents, Karbon, and Canopy.

 

• Secure Document Sharing: Apart from automating document management tasks, these tools handle document transfer and storage using data security measures that are SOC 2, GDPR, and IRS-compliant. Examples include SmartVault, Sharefile, and Box.

 

• Communication and Feedback: Effective communication tools encourage real-time and asynchronous communication between you and your offshore tax accountants.

 

Tools like Slack and Microsoft Teams are great for sharing the files and information your offshore team members need for work. Loom is most suitable for video feedback, while Zoom and Google Meet promote rapport through face-to-face meetings.

Ready to Hire an Offshore Tax Accountant?

Offshore tax accountants not only help you cut costs, but they also help you scale smarter by delivering work faster and building a tax team that can support your growth even beyond the busy season.

 

However, success in offshoring depends on the processes you put in place and the partner you choose to work with. Either way, Finsmart Accounting will make your offshoring experience smoother.

 

Our offshoring checklist will help you understand the measures to put in place to make hiring an offshore tax team a lot more seamless. It gives you a series of questions that evaluate your firm’s preparedness for an offshoring relationship.

 

Once you realize where you need us to come in to help, we can assign you an experienced U.S. tax specialist who will help you complete various U.S. tax forms (1040, 1120, 1065, etc.) in your preferred tax software.

 

Ready to take the next step? Book a free consultation now to speak with our offshore tax accounting expert.