Top 5 Ways to Choose an Accountant
by Tracy E. Hill, Ph.D.
As we get closer to tax season, the idea of choosing an accountant comes to mind. If you’ve been doing your own taxes for a while, are a small-business owner, or just looking to make a change, finding the right tax accountant could be the single most important decision you make for your financial health.
For more than a decade, I had been doing my own taxes using a reputable retail tax preparation service. With this method, I downloaded a program, answered every question in sequence, and lo and behold, I paid the taxes I owed or got a refund. But when I met my current Certified Public Accountant (CPA), I realized that big box tax prep is great for the young and new but not so great for those of us who are farther along in life.
Why? Because we have so much more going on! W-2s, 1099s, IRAs, estate planning, purchases and sales of stocks and bonds, gift taxes, businesses that we own or manage, and so much more. With my new CPA, I found out that I hadn’t been doing my taxes correctly. I had taken a tax credit twice over two years without realizing it and had underestimated a home office deduction. Luckily, the CPA showed me how to file an amended tax return for the two years I had messed up.
So how do you find the right accountant for you? Here are the top five things to consider, based on my interview with Rodney Reynolds, CPA.
- Are they willing to meet with you first for a consultation?
Your financial matters are personal. So before you provide all your tax, accounting, and financial information to someone, make sure that they are willing to sit down with you and have a preliminary talk first. No less than thirty minutes would be appropriate.
- Are you comfortable with your accountant?
Some of us are savers, and some of us are spenders. Some people have a lot of questions and don’t know much about their finances, while others are quite knowledgeable. You should feel comfortable talking to your accountant about anything and everything related to your financial well-being as well as being able to ask any question no matter how big or small. When it comes to your finances, there are no stupid questions.
3. Do they have expertise in areas relevant to you and your family?
If you own a business (whether large or small), have a complicated estate, or possess a vast stock portfolio, you want an accountant who has the skill sets, knowledge, and experience working with these issues. Let them practice on someone else to gain the experience, not on you. A true professional will tell you if your issues are too complex for their level of experience (for example, multiple businesses or rental real estate, etc.).
4. Do they listen and ask the right questions?
Everyone’s taxes and financial situations are different. All of us want to maximize our wealth and minimize our tax liability. An accountant should be able to listen thoughtfully to you and your situation as well as asking pertinent questions related to your finances. These questions are not simply about your current situation but also consider your past and potential future issues. For example, Reynolds Pittner & Associates LLC asks new clients for their tax records from the previous two years because if the current year is vastly different, adjustments may need to be made.
- Does the accountant or firm have a good reputation?
As with most professional services, there are many accountants to choose from. Before meeting with an accountant for the first time, ask around to friends, family, and colleagues if they’ve heard of or know about the one(s) you’re thinking of interviewing. While lawyers are rated in Martindale-Hubbell and doctors are rated on HealthGrades.com or Vitals.com, there is no reputable service to rate CPAs or accountants. So it’s important to ask around.
Many accountants are CPAs. Depending on your situation this may or may not make a difference. CPAs are licensed through a rigorous process, have a fiduciary responsibility to their clients, and can represent clients in front of the Internal Revenue Service. They also need to engage in continued education throughout their career and follow a strict code of ethics if they want to maintain their license.
So what are you waiting for? Happy accountant hunting and good luck with your taxes this year.
Photo credits by shutterstock and SCORE.