Tips for Choosing an Accountant or Tax Preparer

January 26, 2008

For my personal needs, tax preparation software works fine. I answer the questions; plug in some numbers; and presto, I send my taxes off into cyberspace. But, when tax issues are complicated, you might want to seek the aid of a professional. Here are some tips that have been shared with me over the years:

Service Guarantee
First, when you choose someone to help prepare your taxes, get some kind of guarantee that they will back you up, if you should ever get audited. Now, it may never happen. But, you do not want a tax preparer that holds up his/her hands and leaves you high and dry, if they make a mistake. If they can’t guarantee their work, walk away. If they know the tax laws, and are confident in their work being correct, it should not be a problem to stand behind you.

Size Matters
Second, bigger does not always mean better. With bigger companies, you can get lost in the shuffle and become a number, rather than a name. Personally, I would rather go with a small firm that will treat you as an individual. The benefit is being able to ask your tax professional, if you have a problem or a question later. Don’t you just hate having to explain something 3 different times because you have had to talk to 3 different people?

Also, when next year rolls around, having the same accountant is great. He/she has already done your taxes before, they are more likely to recollect you and your financial circumstances, which mean: less questions and expeditiously getting your taxes done.

In short, I can only recommend finding an accountant that will make the process easier for you, and stand behind their calculations. If you are not comfortable with the person, trust your gut. When it comes to your finances, you definitely want someone in whom you can feel confident will do the job correctly and treat you right. Here’s hoping for a refund!



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3 Responses to Tips for Choosing an Accountant or Tax Preparer

  • Shona

    I agree, the home/online tax preparation software works for me as well. Retail tax preparation services, like Liberty Tax work well for people like my mother who have straight-forward returns, but who are not comfortable or confident around technology.

    Having worked for a CPA, I would like to point out something about tax professionals. Reputation and referrals are priceless. The CPA I worked for had the attitude (which he verbalized to me) that he did tax returns “because he had to”. His real interests were in small business consulting and forensic accounting services. So not every CPA is a tax professional. Enrolled Agents are licensed by the IRS to prepare tax returns and represent their clients to the IRS. Registered Tax Preparers are also licensed by the IRS, but the examination and continuing education required in taxation is much less. Tax attorneys are really only needed if you are going to Tax Court, and that usually only happens if you have a lot of money at stake (so for businesses or the wealthy). Of course the most versatile and powerful tax professional out there will be a CPA, EA and JD all in one. But you’ll also pay a pretty penny for their services.

    Which brings me to my next point…costs. It is best to gauge the issue honesty of why you a seeking out professional tax preparation services. Is there really a significant amount of money at stake, or would you just rather not be bothered and have someone else deal with it? I used to shake my head at people who paid $50 for a CPA to do their relatively straightforward 1040A return. If these people really wanted professional service that was a step up from a retail tax franchise, they could have used an EA and saved some money. And if someone takes their tax return to their attorney to do, they would be better off just throwing money into a bonfire!

  • Early Retirement Extreme

    I will probably be going with a tax accountant for the first time this year and was thinking of going with one of the bigger outfits because I was/am under the impression that the smaller operators are more expensive(?). Maybe I should reconsider..


  • * TaxCut Online and 2007 Tax Law Changes