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How To Choose The Right Tax Professional For YOU

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Older male accountant at a desk using old time tape calculator to prepare tax returns

How do you choose a professional?

For anything, really?

When you need legal or medical advice, an electrician, or a mechanic?

Do you take the phone book and choose a random entry?

Do you drive around stopping at the first place you find?

Do you forego paying someone and try to figure it out for yourself?

No.

You shop around.

You ask friends, family, and coworkers for recommendations.

Never do you go in blindly.

But most importantly, you ask questions!

So why would you choose just anyone to hire to prepare your tax return?

Why would you use a chain tax service where you don’t know a single thing about the person who will prepare your tax return?

Many people already have a tax preparer they trust and have been working with for years.

Some people are legacies, and automatically use the person who prepared their parents’ tax returns and their parents’ before that.

This message is probably not for you (unless you’re looking to hire a new tax preparer or are just curious).

The Importance Of Interviewing Tax Preparers

You need to understand one thing:

You are the boss in this scenario, and the professional is working for you. You need to be the one who makes the decision to hire a particular person to prepare your income tax return.

You shouldn’t have to lay out good money for bad service.

Do your homework before hiring a tax preparer.

You will be bombarded with ads all over the place.

National tax preparation chains pay big dollars to have ads all over television and radio.

Online classified sites will be flooded with people claiming to be experts

You’ll even hear about a “friend of a friend” whose sister used this guy out of a back room without windows who got them a huge refund when they should have gotten peanuts.

Sadly, it’s hard to tell who is qualified, who is for real, who should be trusted with your income taxes.

There isn’t a perfect way to find out about a person or company other than to ask around or check out reviews online.

But, even that method has flaws since not everyone is upfront or even 100% truthful in their reviews.

The best way to go about finding someone you can trust to prepare your income tax return accurately and competently is to treat them like a potential employee and interview them.

But, but, but…what kinds of questions do I ask?

Professional & Education Qualifications

Ask to meet the person who will actually be preparing your taxes.

Find out what their background is:

  • Did they go to school for accounting?
  • Did they get a degree?
  • Or did they just take an in-house crash course?
  • Is tax their specialty or just something they mess around with?

Ask about their professional experience:

  • How long have they been preparing tax returns?
  • Is this their career or a side gig?
  • Do they have experience with your type of situation?

Can’t meet that person?

Ask why not.

There’s no reason why a company should keep you in the dark as to who will be handling this very important matter.

Ask about the firm:

  • Does it only do accounting and tax work?
  • Are they available all year round?
  • Is it one of those places that just appears out of nowhere then disappears just as quickly?

You want to work a firm and staff that is really qualified to prepare your taxes, not a retiree who is bored, or a housewife looking to make extra shopping money.

You want to work with people who will be available any time you have a question and who will be available to help you in tax planning at any given time during the year (since major life events don’t time themselves perfectly to fall during tax season when these folks will be around).

LETTERS AFTER A PERSON’S NAME MEAN ABSOLUTELY NOTHING IF THEY HAVE NO PRACTICAL EXPERIENCE IN THE AREA YOU ARE LOOKING TO HIRE THEM FOR!

A kid just out of school with a CPA license, a person who decided to become an Enrolled Agent to gain credibility, a CPA who has only done audit work for the last decade…

All of these people have fancy professional designations, but I wouldn’t trust them with my taxes.

Trust me, a few letters don’t mean a thing without the hands-on experience that is required to do a complete job filing tax returns.

Employee Compensation Practices

This is a question that I’ve never heard anyone talk about when discussing tax preparation.

How will the people who work for that company be compensated?

Are these regular employees who make a regular salary?

Are they part-timers who get a flat hourly rate?

There are a lot of companies that pay “employees” based on volume: the more tax returns they can churn out, the more they will be paid.

You want to make sure you choose a company that has real employees.

You should never have to feel like your return is being rushed just to meet some quota or to reach a bonus level.

The person preparing your income taxes should be willing to spend as much time with you as is needed to do the job properly and to your satisfaction.

Company Pricing Policies

Don’t forget about asking how the company will charge you!

Find out if they have an hourly rate by which they charge or by the project.

When it comes to tax returns, it’s pretty easy to gauge the amount of time it will take once you walk into the office with all of your information.

If you aren’t ready with it all just yet, looking at the prior year’s return should also be a pretty good indicator of how much time should go into your current return (assuming there isn’t much difference).

You should never walk out of the office not knowing how much you are going to have to pay.

That is totally unacceptable.

Even if an exact amount cannot be quoted, you should at least be given a maximum estimate, so you know where you will stand when it is completed.

And if you cannot get a satisfactory answer or someone claims that they don’t discuss billing practices, then walk away…quickly.

How Secure Is Your Information

This might be another item you just never though to ask a accountant, but it is highly important!

You never want to be a victim of identity theft due to the lax manner your account manages the security of their clients’ personal information.

Some of the things you should ask about are:

  • Do they have a security policy in place?
  • Do they keep the computers on all day and night even when no one is working?
  • Do they use email to send documents containing personal information?
  • Do they do criminal background checks on all employees?

It may sound strange but trust me, as an accountant I take protecting my clients’ information very seriously.

I never leave my computer on because the longer it’s on the more time people have to gain access.

I never use email to send documents–only a secure portal with bank-level 256-bit encryption.

My computers are always updated.

You should be able to know that your accountant is just a diligent in keeping your information secure as well.

The 1 Question You NEVER Thought To Ask A Tax Preparer

Who Will Sign The Tax Return?

It’s not something regular folks would ever think about, but this is a very important piece of information.

There are a lot of unscrupulous “tax preparers” who fudge the numbers and do whatever they can to make their clients’ refunds larger than they should be.

But, they also never sign the tax return as the paid preparer, leaving you as the person that says “I put all of these numbers here, and I’m 100% solely responsible for whatever is being reported”.

That’s never a good sign.

The person being paid to prepare your tax return should always be taking responsibility for the information being reported, as they are the “expert” and should know better; thereby bearing some of the weight should you be reprimanded for an egregious mistake.

Sadly, there are plenty of sleazy people out there who will be more than happy to take your money and leave you to shoulder all of the blame for any wrong-doing that went on while preparing your income tax return, so always ask if the person you are going to hire will be signing the return as the “paid preparer”.

You should be concerned with more than just how much it will cost to prepare your tax return.

You should be concerned with more than just how large of a refund you will get.

You should be concerned with quality and accuracy more than anything when it comes to filing your taxes.

No cost savings or extra refund will make up that uneasy feeling you have wondering if you are going to get a letter from the IRS about why you got more money than you thought; especially when the person who prepared the tax return can’t (or won’t) give you a clear answer as to why.

If you reached this point and are thinking to yourself “I’m just going to do it myself” or “I don’t think my situation is complex enough to pay for tax preparation” allow me to give you one piece of advice:

Choose one of the two best online tax programsTurboTax and TaxSlayer. Both continuously get the highest ratings for preparing the simple returns that you can do yourself and save on the costly tax preparation fees…go check them out before you do anything else!

If you’re curious, you can also read about my thoughts on online tax programs.

Your Turn

How did you approach finding your current tax preparer? Did you just go with your “family’s guy/lady”? Did you just pick a name from a directory and go with them? Did you ever regret your decision to not take a more measured approach?

CHECK OUT THESE OTHER INFORMATIVE ARTICLES:

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Cameron Bennett
3 years ago

I’m glad that you mentioned making sure that a tax preparer has experience in the specific area that you need help in. It may seem like a daunting task to find someone to help you with your taxes, but it’s worth the time and effort. Finding the right person can save you a lot of stress in the long run.

Arthur Morrison
Arthur Morrison
2 years ago

I love a lot of the questions that you recommend readers ask about the tax professional’s qualifications. For example, you will definitely want to make sure that they’ve gotten a professional, specific degree in tax education. This is especially important if you will be relying on them to help with your business’ tax issues.

east
2 years ago

I like the tip that you gave to choose a tax surveyor who has the proper qualifications. My wife and I have been talking about finding a tax service to help us with it this year, and it would be important for us to know that we can trust in who we decide to hire. If we decide to hire help with our taxes, I will be sure to look for one with the proper qualifications.

drake welsh
1 year ago

It was helpful that you suggested to meet a tax service before you hire them to ask them about their professional experiences. We are going to need help with our first year of paying taxes as a business, and it would be important for us to know that we could find one that will be good for us. When we choose a tax service, I will be sure to choose one who has professional experience.

charles
1 year ago

I love that you mentioned that when you are choosing a tax professional, you need to consider their quality. My taxes have always been confusing, and I want to start hiring a professional to help me get the biggest return this year. When I look for one, I will be sure to consider their quality.