How to Select a Good Tax Professional

Bankrate has some thoughts on how to select a tax professional. Here are the tips I think are especially important:

• Look for a certified public accountant, an Enrolled Agent or a tax attorney. "Typically, these preparers are required to maintain continuing education credits to maintain their designation," notes Hockenberry. "This is a real plus for the taxpayers because they will have some additional security knowing the preparer they chose is up to date on the latest tax law changes."

• References are easiest to check when you use a preparer recommended by family and friends. If you select someone totally new to you, don't be afraid to ask for references and follow up with them to see if they are satisfied with the service.

• Hockenberry also recommends checking the preparer's fee before any work is done. "This will eliminate any surprises when you go to pick up your return," she notes, "and will also tell you if the preparer overcharges in comparison to other preparers in your geographic location."

A few thoughts from me:

1. I use a CPA to do my taxes and have done so for years. I have several reasons why I do this.

2. Ask people you know and who you think are doing well financially (you don't want money advice from someone doing poorly, do you?) who they use to do their taxes. This should give you several choices. Then call a few of them, schedule a meeting to see if you can work with them, and ask them for references. Call the references and see what they have to say about the preparer.

Of course, they'll give good recommendations (why else would the preparer suggest them?) but I've found that saying something like, "I know that you really love Bob as a preparer, but if you could change how he does anything, what would it be?" This will get you far more information than a simple, "Tell me what Bob does wrong" or similar statement.

3. I agree with my preparer IN ADVANCE what the cost will be. My firm has a habit of trying to raise fees 10-15% per year as well as tacking on a fee for every little thing -- copies, mailings, electronic filing, etc. (And I don't mean small fees, but something like $1 a page for copies.) As you might imagine, I don't go for any of that and I negotiate the TOTAL price in advance each fall (roughly in October) to give myself enough time to find a new preparer in case we can reach an agreeable price.

Comments

[RateNerd]

My business partner and I gave all our business to the same CPA to handle our personal and business taxes. As a result, he is doing a better job, has more visibility into our total picture, and his fees get charged to the business. I have also found that after getting to know him better that he is more aggressive than I had originally thought - a good thing in my book!

[David Stillwagon]

Finding someone reliable and knowledgeable about the tax code is so important when choosing a tax pro.
Good article!

[TStrump]

Good tips!
I'm an accountant, and it's so important to decide a price and know your clients expectations ahead of time.