By now you may have decided on using a tax professional for your taxes. While you can certainly get your taxes filed at a number of places, working with a CPA may be beneficial. A CPA or Certified Public Accountant has passed certain examinations and met all statutory and licensing requirements in the United States of America.
If you’re able to find a trusted professional, you can develop a relationship with this person and work with them over many years to come. This allows them to get to know you and your situation better which can only help insure your tax situation is in order. For example, a CPA can help you take the appropriate deductions you qualify for and avoid missing any credits. A CPA can also alert you to changes in tax law that may affect you.
So, how do you got about finding a CPA to become your trusted tax advisor and service provider?
What to look for in a CPA
Certainly, these characteristics are somewhat subjective, but I would feel strongly about not entering into a professional relationship with someone who doesn’t posses them.
Integrity
The person must have a solid track record of ethical and morally sound business decisions. How do you determine this? The best way is to contact three references. If there are no references, or the CPA won’t provide them, choose to go somewhere else.
Organized
Organizational skills are important qualities for a CPA. If you walk into the office, or look at the CPA’s desk and its stacked high of papers and everything seems out of order, you may want to be cautious. If a CPA is unorganized in managing their office, or work, you can bet they’ll be unorganized in managing your return. Again, paying attention to the office and contacting references will help surface any issues here.
Ability to explain complex tax laws in an easy to understand language
I work in software and several people in our department are software developers. They are the most technical of software professionals. They are required to explain complex software development issues to management and sometimes customers. CPA’s are technical in the nature of their work as well. It is their job to make sure you understand your return and the tax strategy they are recommending.
Advisory skills
You definitely don’t want to find a CPA who only files your return for you. You can get that with much cheaper services, or even do the return yourself. Rather, you want a professional who is going to sit down and look into your situation and provide sound advice. Furthermore, you want a professional who is going to help you strategize on your taxes, especially, if you’re working with them for business taxes.
Steps for finding a CPA
- Determine your needs: first, determine why you’re seeking a CPA. Is it for a personal return, or for a business? Are you concerned you’re having too much withheld from your paycheck each month? List out all of your needs so that you have this handy when you begin your search.
- Conduct a search: the process can go pretty quick if you start close to home with friends, relatives and co-workers. I think a really good idea is to contact people you know at your church to see if anyone in the church is a CPA. You can also check out Dave Ramsey’s Endorsed Local Providers.
- Set meetings: In my personal opinion, I don’t think it’s wise to meet with less than three people. I typically follow the rule of three whenever I’m getting estimates for anything, especially, when it’s forming a business relationship. However, depending on where the recommendation comes from, you may choose to meet with only two people. Don’t ever meet with less than two.
- Collect information: Before your first meeting, you’ll have wanted to do some homework by collecting the last two years of tax returns and supporting documentation. You may also want to take copies of your latest pay stubs and bank statements for the meeting. Unless you make a decision to work with that particular CPA, don’t leave the documents with them.
- Ask questions: Learn as much as you can in the meeting. You can expect to meet for about 30 minutes, so find out the CPA’s background, how they would advise or work with you, how often they would recommend meeting with you and their fees.
- Get references: Finally, make sure you get at least 3 references you can contact. Ask the references about the above characteristics (integrity, organized, advisory skills, etc.).
What do you think about these essential characteristics and steps in finding a CPA?
Reference: Finding the Right CPA, Business Week
There’s one thing that you forgot to mention. Many people think that just because a person prepares tax returns, then he/she is a CPA and that’s not true. Only Enrolled Agents and CPAs are governed by professional standards so it’s important to choose either one of these for a knowledgeable tax preparer. Also, we have to take continuing professional education each year to keep up with tax laws. People should ask if their tax preparer has taken this education during the year to be familiar with the current tax laws.
Linda, thanks for this value added comment. Those are excellent questions for readers to ask as they search for a professional that meets their needs.
It’s great if you can get a referral to a CPA through a bookkeeper or business accountant who has experience with different CPAs. In working with my clients, I’ve become familiar with lots different CPA practice styles and expertise. Some CPAs focus on compliance work whereas others are willing to also handle tax advisory matters such as a schedule of Traditional to Roth IRA conversions. Some CPAs are very high-tech, e.g., familiar with QuickBooks, willing to exchange electronic files, etc.
Thanks, Susan. I think this post is becoming quite a good resource for people with the added value you and Linda providing your insight from the CPA perspective. These are all good thoughts that can be changed into the form of questions when looking or interviewing a potential CPA for your personal situation. Thanks for commenting!