Don’t Freak Out About Taxes: 5 Things to Consider When Choosing an Accountant
Tax season is upon us! For many of you this may feel like a very stressful time based on two factors: being underprepared or under-informed – probably both. Before you beat yourself up about it or ignore it altogether because it makes you uncomfortable, let’s look over some facts.
Why taxes freak you out.
Today’s tax code has ballooned to over 2 million words, crazy right?
There are nearly 8 million words in the form of regulations explaining how the tax code actually should work.
Add to those numbers about 60,000 pages of tax-related case law that help to determine actual tax liability.
Really though – why wouldn’t taxes freak you out? You’d think if the government wanted their money, they’d make it easier for you to give it to them – am I right? There is a reason people like us exist. It truly takes a lot of education and a full-time job’s worth of time invested to understand the paperwork and the nuances that allow you to not only file everything correctly but also keep as much money in your pocket as possible – aka get the biggest refund. First, forgive yourself for not being an expert.
Why you should invest in an accountant and not file for free by yourself:
The next thing people do when they are avoiding paying attention to their taxes is take what feels like the simple road and file by themselves using a service like TurboTax. We see the appeal! You can hide behind your computer, answer the prompts and avoid paying any additional fees – or do you? The reality is, those programs are completely surface level and do not dive into the details needed to get you your biggest refund. Why would you ever want to pay more to the government than you have to? You don’t. While you may avoid a couple of hundred-dollar fee with an accountant, you end up paying more than that in unnecessary taxes meaning you lose more money taking this route.
How to pick an accountant?
You’re now on board with needing an accountant to help you file, but where do you start? There are a few things to think about when picking an accountant that’s the best fit for you.
1.Credentials and Continuing Education
The crazy part about tax law is once you’ve learned the 2 million words of tax code, 8 million words of regulations and 60,000 pages of case law – something changes. When you are picking someone new to work with, ask them what they do to stay current on the new stuff and sharp on the old stuff. Continuing education, new certifications, and attending seminars and conferences are all great signs that this practitioner takes their craft seriously. It’s important not to sign up with someone who is rusty.
2. Audit Experience
It’s all fun and games until you get stuck in an audit. That’s when things get real. You’ll want to be in the trenches of an audit with an accountant who has been there before and knows the ropes, what to expect and how to make that process as smooth and painless as possible. Ask your potential accountant what experience they have representing people before the IRS.
3. Practice Structure
Ever heard the phrase “two heads are better than one”? Well, a team is even better than two heads. A practice with at least a few team members means multiple experts working together, learning from each other and pushing each other to be better. It also means more people to cover more work. A solo practitioner can get overwhelmed pretty quickly and may not have the time or diverse experience to give you the full attention you deserve the way a team would.
4. Communication Style
Do you know what’s supremely unhelpful? When an accountant talks to you like you’re one of their fellow accounting buddies who love talking about accounting things. You aren’t an accountant, that’s why you are hiring one. A big warning sign is when you feel you need a dictionary just to understand what your accountant is saying. Pick someone who is an effective communicator and can articulate concepts in a way you’ll comfortably understand.
When you have an introductory phone call to see if a firm is a good for you, ask them a few questions and see if their responses make perfect sense to you. If they don’t, they aren’t the right fit. Here are a few common questions to get you started:
Should I file with my spouse or file separately?
Can I deduct my home office because I work from home several days a week?
What are quarterly estimates and how do I send them in?
5. Personality
Eck, accounting is dry enough without sitting in a room with someone who has the personality of a potato. Plus, this person is going to be all up in your personal business. Feeling comfortable and connecting with that person is important. It’s arguably the single most important factor when trying to get the most out of that relationship. Don’t underestimate this piece and consider it when you are exploring different people to work with.
Choosing an Accountant:
If you are on the hunt for the right fit for you, schedule an introductory call with us. We can help with everything from personal taxes to small business financial management and bookkeeping. We even offer a lot in the way of guidance and advice for small business growth or building wealth.
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