Stop right now if you're thumbing through a phone book trying to find an accountant - there is a better way. Thought should go into your choice, because you will trust this person with your tax return and to handle your other personal, business and tax-related issues. It is vital that your accountant should have both the abilities and skills to take full advantage of the tax laws for your benefit.
In this article, we'll give you some shopping tips to help you find the right accountant for your needs.
SEE: 529 Tutorial
CPA/Membership in AICPA
Every year, U.S. colleges turn out new accounting grads, but just because these grads have a degree in accounting doesn't mean that they are completely fit to handle your individual tax needs.
In order to increase your odds of retaining an individual that is up to speed with the most recent tax laws and who can help your personal situation, look specifically for individuals known as Certified Public Accountants (or CPAs). CPAs have passed the Uniform Certified Public Accountant Examination and have met certain education and experience requirements. As such, they are much more likely to be able to provide their clients with good service and advice than someone who has experience mostly in corporate accounting or another specialty.
Another thing to look for in an accountant is membership in key organizations such as the American Institute of Certified Public Accountants (AICPA). Why? Because to belong to this organization one must take a number of continuing education credits to make sure that their skills up to snuff with the latest laws. Another positive is that members routinely interact with their peers (other members) and swap advice. As such, they may be better able to provide their clients with better service than someone without this backing.
Choosing a Firm
Large firms, particularly those that cater to large multinational companies can be cold and treat your account like it's small potatoes. Conversely, smaller accounting firms that are run solely by one individual tend to be overburdened with returns, and also have trouble giving your situation the attention it deserves. With that in mind, the goal for most individuals should be to find a happy middle ground. A firm that has the resources to take full advantage of the tax law, but not so large that your return falls by the wayside, would be ideal.
Referrals from friends and/or other professionals, such as an insurance agent or a stockbroker, are one of the best ways to identify a competent firm. Regardless of the source, it's important to interview prospective firms so that you'll get a feel for where you stand and/or if you'll be viewed as an important client.
In terms of interview questions, be sure to ask:
|Will I be assigned to the same accountant year in and year out or multiple accountants?
If I have a question, who can I call?
What is the process for reviewing the return before it is mailed out?
In short, these simple questions (and answers) will give you a taste for whether the firm is serious and professional and will treat your account with the utmost respect. Or you will find out if the firm's bread and butter is mainly large corporate clients and it isn't interested in the business of hand-holding smaller clients.
You shouldn't ever pay for an interview. Accountants should be willing to meet prospective clients, and discuss their firms and their abilities free of charge.
Check Your Accountant's Personality
While it's important to retain someone that is cognizant of the tax laws, it is equally imperative to retain a CPA with a personality.
Personality is an important factor for consideration, because good accountants talk with their clients about more than just numbers. They should talk about the client's income and spending habits. They also proactively identify possible deductions, and are approachable and willing to answer questions for their clients.
During the interview process one should be able to glean whether the accountant is approachable and has the communications skills necessary to build and maintain a fruitful business relationship.
Consider the Plan
Again, there are some accountants who want no interaction with their clients other than having to see them once a year during tax season. However, the best accountants (those with clients that tend to fare the best come tax time) are communicators. As such, they'll call you throughout the year to make sure that you are retaining important paperwork, sit with you to discuss the value of opening a 529 plan for your child's college education, or talk about the importance of establishing a trust for estate planning purposes.
In order to determine whether the accountant you are interviewing is indeed a planner and a communicator, ask the following questions:
|How often will we sit down or talk throughout the year?
Do you or your firm actively set up trusts, engage in estate planning, or provide investments?
Calculate the Price
There are accounting firms that charge less than $100 and take only a few hours to file a tax return. If you have a very simple tax return, this may be the best option for you. However, if any part of your filing is unique to you (and it most likely is) accountants and firms that take more time with the return, charge more and ask probing questions tend to take advantage of a larger number of deductions and credits for their clients. Remember, like your parents always said - you tend to get what you pay for.
The Bottom Line
While many individuals entrust their tax returns to a newly minted accountant, it pays to retain an experienced individual that is proactive with advice and is willing to, if necessary, hold their clients' hands through any filing issues that may occur.