I Hired a New CPA

As most of you know, I use a CPA to do my taxes (click the link if you want to know why.) Recently I made a change from one CPA to another and thought I'd explain the situation to you all.

I had used my former CPA for 10 years or so. Actually, it was the firm that I had used for 10 years or so. During that time I had three different CPAs at the same firm.

The firm was originally referred to me by a friend who I knew to be a pretty good money manager. He used them to do his taxes as well. I interviewed a partner at the firm, and they were good. I signed on despite the fact that they were pretty pricey (again, look above if you want to see the reasons I use a CPA.)

The firm handled my taxes for 10 years and did a decent job. We had our problems, but in the end things always worked out. That said, I wasn't completely happy. The reasons I went looking for another alternative are these:

1. Expense. The firm is a big accounting firm in the area (they've grown substantially over the years), have lots of overhead (very nice offices), and their fees have ballooned to match.

2. Offers no advice/planning. They simply do my taxes. That's it. No advice on "do this" or "do that." All my planning is on my own. Even when I ask a question, they seem to know less about it than I do, they go do some research, and come back with a half-developed answer.

3. Location. It is not convenient for us to stop by their offices when need be. They live in an entirely different part of the city than we do (though it's all relative, our city isn't really that big.)

4. Importance. I'm a miniscule part of their business -- and feel like I get service commensurate with that status.

This summer I was introduced to a different CPA at a party of friends. As we talked business, I asked him several questions about taxes and liked his responses. He had ideas on steps I could take to reduce my taxes (and offered ideas to others as well -- for example, to another friend who invests in real estate) as well as plan better for the tax consequences of future events.

I asked for his card and met him for lunch a month later. My interview was a bit more intense this time. It turns out he was one of two partners in a small firm of 12 people (they are growing -- hiring one new person a year). He has been a CPA for a couple decades now and seems very knowledgeable, personable, and willing to put some effort into helping me. I agreed to let him review two years' of my tax returns. I made copies and dropped them off at his office a few weeks later.

A couple weeks after that, we had lunch again. He had three pages of tax-related suggestions for me. We discussed them and again I was impressed (this time with the work he had put in). I agreed to have him do my taxes this year. We'll see how that goes and evaluate the situation afterwards.

Here's how he's going to address my concerns:

1. Expense. He'll be a few hundred dollars cheaper than my former CPA. Lots less overhead with this firm.

2. Advice/planning. He's already offered several ideas and has agreed to keep doing so each year.

3. Location. His office is nearby where I live and work. Easy to run to during lunch if need be.

4. Importance. I feel more important to him than I was at my other firm. Not sure that's the case, but I suspect it is simply based on the size of the firm.

I'll let you know how the relationship develops and if anything noteworthy happens this tax season.

Comments

[Melissa@LillePunkin]

I interviewed an accountant last year who clearly did not get the idea of blogging or making money from it. Needless to say, I moved on and found a good one. Glad you found a new accountant and hope it works out for you. (Sounds like you are off to a good start.)

[JM]

I am a CPA, and it sounds like you made the right decision. There is no reason why a hired CPA should not give you strategies and answer questions thoroughly throughout the year. That's what they're hired for! Let us know how it goes.

[MonkeyMonk]

Just curious why you seem set on hiring a CPA rather than some of the other tax professional out there? I would think a CPA might be overkill (and more expensive) than your needs might dictate.

Personally, I've used an independent enrolled agent for the last decade and he's would score excellent points for all four of your reasons above.

[FMF]

Monkey --

I wouldn't be opposed to an EA if someone recommended one, but this CPA was recommended (something I'd want from anyone doing my taxes) and we seemed to click when I met him. His cost is reasonable, so why keep looking?

[JKC]

FMF,

Thanks for this post. I love your reasoned explanations for your switch. I have been thinking of a switch for similar reasons. I live in an entirely different city from my accountant. Is it really an asset to be nearby? I am trying to quantify the benefits of being able to "stop in during my lunchbreak". Currently, I do everything via email, post, and phone, but I miss the personal interaction. Do let us know how it works out.

JKC

[MonkeyMonk]

Glad you found a reasonably-priced CFA. When I was looking for someone to do my taxes many years back all the CFAs I interviewed were double the price of the EAs I talked with. I agree though that a personal recommendation would trump at least some portion of a price difference.