Tax Preparer
0 5 min 2 mths

Finding a good tax preparer is easiest through word of mouth. Compatible personalities are crucial. You want to find a reliable financial confidant. That’s a sensitive issue that calls for a lot of trust. The basic skill is essential; a good preparer should be able to answer simple questions without consulting a reference. In addition to the obvious inquiries, you may choose to probe the following topics as well.

You shouldn’t just inquire as to the volume of tax returns prepared by an accountant, but also “what kind?” You should find a tax preparer who specializes in schedule “C”s if you file that form. Do not accept a vague response from them like “Oh, we do a lot of those,” as their tax software likely keeps track of such things.

Inquiring, “who does the work?” is the next crucial step. The $175/hour price is not reasonable if the tax preparer you’re talking to hands over all the work to an intern or recent college grad in the back room. Some companies are even going so far as to outsource tax preparation. It’s also worth noting that other courts do not recognize US confidentiality laws.

A competent tax expert should be able to offer some advice. Something about your tax status has to interest them enough to offer an opinion.

On the other hand, if your tax preparer has a lot of ideas and tries to sell you other services, be very skeptical. Such as loans taken out in expectation of a tax refund, brokerage services, insurance, and so forth. Due to this bias, they cannot give objective recommendations. You want them to be on your side when going up against the IRS, not planning how to make commissions off of you.

Check to see if they can manage different states. Do they have the ability to do both your current state of residence and the state where you plan to retire, Arizona? When relocating permanently, it’s recommended to get a new tax accountant. There are subtle differences across states’ laws that the locals know all about. If you hire a tax preparer who isn’t local to your area, they will either take too long or won’t catch some of the finer details.

Inquire as to the method used to set the price. Many people adhere to a strict timetable, whereas others do it on an as-needed basis. Try to get a rough price quote. Get a copy of the pricing schedule if the cost is determined by the number of forms you need to be completed. Take a look at their price list and see how much filing your taxes last year would have set you back. The cost of the previous year’s tax return preparation is typically deducted in the “miscellaneous itemized deductions” section. Preparers who are asked to provide an estimate will want to see the form and may give the amount paid the previous year a cursory inspection. Most people won’t go lower than this. If you want to do the math, just ask for their pricing schedule. Afterward, you should inquire as to whether or not that approximates reality.

Finally, you may be curious about what occurs during an audit. Although unlikely, it is not impossible. Audit assurance is a service provided by some companies. In most cases, “audit insurance” is not a fair financial deal for the taxpayer. Simply inquire as to the number of taxpayer audits conducted during the past three years. Do not get discouraged by a vague response. They have counted, and they know there aren’t many.

An alert is not the same thing as an audit. What should you do if you receive a notice—and while notices are typical, audits are not. If the preparer receives a notice, will they respond to it as part of the tax return process?

CPAs tend to be a sober and responsible lot. A seasoned expert will have seen it all, including difficulties very similar to your own. They might provide invaluable insight. Make sure they have no dual allegiances and are truly on your side.

Finally, when you finally do discover someone you’re happy with, don’t let go. Dealing with them for a longer period of time increases their worth. Over time, they learn about you, your priorities, and your challenges, allowing them to provide insightful guidance.