Now is a fantastic time to find a new CPA if your current one is a dud. If you do this now, you won’t feel the pressure that the procrastinators feel who wait until February or March to do this. CPAs are easily available to interview now and the best news is it’s really not that tough to find a good fit.
Why You Might Want To Switch
There are a host of reasons why it might be time to hire a different tax preparer. But let’s consider cost right now. The National Society of Accountants* recently reported that the average fee for preparing a Federal and state tax return (using a Schedule A with itemized deductions) was $246. Are you paying much more than that? If so, it might be time to talk to a few other people who are more reasonably priced or even consider doing it yourself.
Compile a list of 4 or 5 candidates and go meet with each one. Just make sure to bring your last 2 year’s tax returns to the meeting. Ask each one to give you an estimate of what the charge would be for them to do the work. If somebody gives you a figure far outside of what the others are asking for, ask for an explanation.
Don’t cut corners when it comes to this interview process. Take the time to speak with all 4 or 5 qualified people. This is the only way to really know what a reasonable cost is to have your tax return done.
What You Want From Your CPA
Some people just need a simple tax return done. Others want their CPA to provide business consulting. Before you start interviewing candidates, make sure you know what is you are looking for. Another topic to discuss during your meeting with prospective CPAs is who will be doing the work. Make sure the top dog is on your case rather than some young pup underling. Sometimes CPAs outsource your tax return preparation to people overseas that may not be qualified. That’s not someone you want on your team. You should also shy away from CPAs who sell investments. Who needs a distracted CPA on doing their taxes?
Don’t Go Super Cheap
Regardless of who you use to do your taxes, you will be held liable for any mistakes they make. If you use a low-budget tax shop, they might make more errors. Kinda defeats the purpose. Right?
That’s why cost alone shouldn’t be your only concern. And on a related topic, stay clear of anyone who makes bloated claims about the large refund he or she is going to secure for you. If anybody promises you a huge refund, ask them how they are going to do it. If it means they’re going to cut corners or do some “magical thinking and creative number crunching” tell them to take a hike. Remember, you’ll pay big time for any funny business the IRS catches you playing.
Once in awhile, a CPA will provide the tax return at a ridiculously low rate in order to get you to invest with his or her firm. This a terrible idea because you want your CPA to be impartial at all times. In my opinion and experience it’s never a good idea to invest with a CPA.
Birds Of A Feather
Make sure to work with a tax preparer that is used to working with people who face a situation like your own. If you own rental property or a small business for example, you want a CPA who is familiar with the challenges and opportunities people like you have. Get lots of referrals from your cohorts.
Complaints And Problems
After you’ve gotten CPA referrals form the right sources, check them out thoroughly. Contact the Better Business Bureau, the state board and the IRS to see if they have any blemishes on their record. In this case, no news is very good news.
If You Are Considering Making A Change
If you have decided that enough is enough and it’s time to “graduate” your current tax prep provider, make sure you get copies of everything in your file. That includes all your returns, all the working documents you provided and any letters from the IRS or state.
You should also ask for the notes and work up papers the old preparer created. She doesn’t technically have to cough up these documents, but if you use enough pressure, you’ll get her to see things your way.
You may have heard it said that the most expensive thing you can buy is a cheap haircut. The same concept applies to income tax preparation. Cut costs when possible but do whatever you must do to keep tax authorities away from your door. If that includes parting ways with a few “Benjamins” so be it.
Have you hired a new CPA recently? Was it a successful transition? What would you do differently?