For some taxpayers, it's a familiar tale. Somewhere during those first four months of every year, you do your taxes in a haphazard fashion, or you look for someone to prepare your taxes, and because you've waited until the last minute, you find someone in a hurry to do them. Every April, as you pay your preparer and Uncle Sam, you vow: Next year, I'm finding a good tax accountant.
Well, the year will be over before you know it. Now would be an excellent time to look for that good tax accountant. Or, rather, the right tax accountant. There are plenty of good ones out there; they just may not all be the right one for you.
This is easier said than done, however. If it was simple to find the right tax accountant, you would have by now. So what accountant should you be looking for -- and where?
How to look when selecting a tax accountant. Beyond trying to find someone who is competent, someone who you feel comfortable working with is a good start.
And you'll feel comfortable by asking a lot questions, says Abby Eisenkraft, CEO of Choice Tax Solutions in New York City.
If you're working in the U.S. but you aren't an American citizen, you'll want to inquire if they have experience working with expats, Eisenkraft says. Same goes with if you're self-employed or have any unusual or special circumstances.
"If your tax professional doesn't specialize in your area, something could potentially be missed. Not good," she says.
You should also ask if they're available throughout the year, she adds. This is especially a good question if you are self-employed and make quarterly estimated payments or have issues with the IRS and fear this may not be a one-time tax visit.
"If you receive a notice after the tax season ends, you want to be sure you can locate your tax professional for assistance. Those shops that are gone on April 16 are of no use to you long term," Eisenkraft says.
Where to look. That can be tough at first, if you want something beyond a tax preparation chain -- and there's nothing wrong with going with one, but obviously, you can find one pretty quickly in a phone book (yes, those still exist) or in a search engine. If you're looking for something particular, you may want to try ...
Social media. Ask your friends and family who they use. You'll likely get a ton of answers, many of them impractical -- your cousin, 2,000 miles away, may have a great idea for a tax preparer, but you probably don't want to travel 2,000 miles. You may find some gems among the answers, however.
Industry trade shows. This can be a smart option if you're self-employed or a small business owner, says Betsy Storey-Bono, director of business development at Concannon, Miller & Co. P.C., an accounting firm and business consultancy in Bethlehem, Pennsylvania. Storey-Bono says that tax accountants and business consultants from her company often show up at trade shows, sometimes at a booth and sometimes not.
But if you can find a tax accountant at an industry event, that's ideal. "Typically, that person or firm will really understand the industry," Storey-Bono says.
Consult other professionals that you use. If you have a financial advisor, he or she probably can make a referral. If you are a business owner, Storey-Bono suggests "talking with business peers or to your attorney, commercial lenders or other business professionals."
What to look for when you work with a tax accountant. Unfortunately, kind of like taking a car for a test drive, you really won't know if your tax accountant is a good fit until you're working with him or her.
But Nathan Byers, a certified financial planner who runs JBC Wealth Advisors in Madison Wisconsin, says that a red flag may be if your tax accountant keeps warning you about red flags.
"Are they afraid of the IRS or are they interested in you paying the least amount of tax? To clarify, paying the least amount of tax is legal. This is called tax avoidance," he says, adding that tax evasion is different and should obviously never be considered.
"However, if your tax accountant avoids certain tax strategies because they think it is a red flag, then this a tax accountant who is scared of the IRS. Following the rules and paying the least amount of tax is why you hire a tax accountant. Hire one who is an advocate for you," Byers says. "If they advise you to avoid red flags when it's perfectly the right tax strategy, you are intentionally overpaying tax."
Of course, you aren't a tax accountant, and if you aren't a financial advisor like Byers, you may not know if you're suggesting something that is the perfectly right tax strategy -- or an idea that could end up with you being audited, then in court, explaining that you didn't mean to cheat the government. Still, Byers has a point that your tax advisor should be looking out for you, their client, and if your gut is telling you that he or she isn't, it's probably best to move on.
On the other hand, as noted, there are a lot of good tax accountants out there, but there are also a lot of disorganized and frustrated people who struggle with maintaining receipts, records and old tax returns. If you have trouble finding someone that you enjoy working with, the trouble may not be with the tax accountants but the taxpayer, i.e., you.
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