21 Questions you MUST Ask to Choose the RIGHT Professional to manage your Taxes
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by Nick Hodges
The Internet super-highway opens up marvelous opportunities for you to harvest tax advice and information from some of the greatest minds at reasonable prices from anywhere in the world. But it also emphasizes a crucial question: How do you know whom to trust? Sharing your intimate, personal financial information with a stranger is problematic at best.
Here are 21 questions to help anyone choose a tax and/or a financial professional you can trust.
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Physical office. Do they have a physical office that you can visit? Even if you never have to meet them face-to-face, the professional integrity required of a firm conducting a bona fide business should be considered.
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Reachable contact person. Is there an actual person who will be ultimately responsible to take care of you and your financial world?
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Valid licensure. Does their home state licensing board affirm that the tax professional you would like to use has an active license in good standing?
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Clean history. If the tax professional is also a registered investment advisor, does their state or the SEC affirm that they have a clean history?
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Age of business. How long have they been in business? If they are too new, they may not have the experience necessary for your unique situation. If they are nearing retirement, they may not have the interest to stay current with the changing regulations.
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Size of practice. Are they a sole-practitioner? Or do they have an entire team of professionals to help serve you? If you are dealing with just one practitioner, what do you do if something happens to them? Do you know who will help you if the IRS decides to coming knocking at your door?
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Experience of a professional, how big is too big? Will you have access to the senior professionals in the firm, or are you working with firms so big you are just getting the inexperienced junior preparers? Those who work at large, international corporations often have the opportunity to use large, international accounting firms, and pay thousands of dollars just to be ignored by inexperienced junior preparers. Larger is not always the better choice.
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Reputation of firm. Does the firm specialize in keeping and building long-term relationships with their clients? Do you know what are their clients are saying about them?
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Related services. Does the firm offer other services to help you so you can get the “one-stop financial shopping” you need? If so, what are they offering? How do they help you understand which services you really need?
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Name recognition. Are they nationally-known in their industry? Do they teach other tax professionals? – The best way to really know something is to teach it to other professionals.
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Online presence. Do they have a website?
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Ongoing support. Can they continue to help you after you return to the US?
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Entrepreneurial support. What if you start a business? Can they continue to help you?
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Tax forms. Do they know the proper use and filing of forms. More importantly, can they explain them to you in simple enough terms to help you really understand the tax challenges of your situation?
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Fees charged. Are they charging too little for you to receive the quality, professional service your situation requires?
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Quote for service. Are they charging too much (sometimes thousands of dollars), or do they hesitate to give you an upfront quote?
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Personal interaction. Will a live person speak to you before they take your money?
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Tax organization. Will they provide you with a specialized tax organizer to help you gather all the information you are going to need?
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Tax law updates. Do they send out a newsletter to keep you updated on tax law changes?
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Information sharing. Will your personal, private information be shared with outsiders or shipped out of the country for processing?
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Comprehensive coverage. Do they offer to go beyond just getting the numbers right, to working with you to get the answers right for your entire financial world?
Take the time to thoroughly interview the tax professionals you are considering to help you manage your taxes.
This simple step, interviewing a tax professional, could save you from creating sticky situations in the filing and management of your taxes.
Nick Hodges,
President of NCH Wealth Advisors
The above post was edited. I did so in order for this guest post to be relevant to all taxpayers looking for a tax professional. For more very relevant information please see my post Find a Tax Preparer that is right for you, Should I do my own taxes. . ., Choosing a tax preparer. . ., More on “finding a pro”. . .
Also check out my series on the subject that starts with Mistakes Made. . .
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Bruce and Nick -
Just a comment on “do they hesitate to give you an upfront quote?”
It is impossible to provide a quote without actually knowing everything that is involved in the specific return.
When someone would ask me “How much do you charge for a 1040″ I would reply “Anywhere from $45.00 to $250.00″. The best I could do to answer that question is to state my “minimum fee” and provide a copy of my fee schedule.
Many factors go into determining the fee for preparing a 1040 -
* How many supportive schedules and forms will be required?
* Are involved calculations necessary to determine the amount of an item of income, deduction or credit?
* Is the client organized, or do you need to spend a lot of time going through records and statements to determine deductions, cost basis, etc?
* Does the return involve a unique issue that requires research?
So you see it is often impossible to provide a specific fee quote without actually doing the return – unless the return is extremely simple.
TWTP
Dear TWTP,
No it is not impossiable to give a fixed price upfront quote. Please see my web site for US Expats. I provide a complete financial package including the preparation of their tax return for $750. Please watch our video on the site to see all that we offer for that price.
In addition, if you would like to live 2,000 miles or more away from your tax practice and make more than most tax professionals AND….work less than 5 weeks a year.
Than check out my ste for tax professionls at http://www.TheLazyCPA.com
All the Best
Nick Hodges CPA/PFS,MBA,CFP
ROFLMAO @Nick – How generous of you to throw in tax prep for the low,low price of only $750 dollars.
By the way – since CPA stands for certified public accountant which in reality is 98% banking, payroll, financial statements, ar, ap, purchases & inventories, etc and 2% taxes – compared to a ‘TAX professional’ which in reality is 100% taxes, will CPA’s be joining us poor little old tax folks in getting these special TAX preparers licenses also????
Tom K -
I like your thinking!
Right on!
TWTP
Guys -
And, oh yes, I will resist all temptation to respond to the title “The Lazy CPA”.
TWTP
Let me clarify something, I’m not trying to pick on anyone it’s just that if we’re going to implement this tax licensing stuff than I want it to be fair and on equal grounds for everyone.
My opinion regarding all this cattle talk is, if in anyway, shape or form you handle tax preparation for others on a for pay basis, that includes CPAs, public accountants, bookkeepers, foreign country tax prep. shops, McHenry workers, franchise owners, etc. then I want them ALL to be either specially certified, registered and/or licensed to do so.
(At this moment, I am un-decided about the testing part – part of me says yes everyone should at least have to take a basic tax test before being issued that first license and part of me leans towards maybe having some type of grandfathering in clause.)
I would also want EVERYONE that works for the IRS from Mr. tax cheat himself Timothy Geithner down to that lonely telephone tax answer person to be required to get tested and licensed also, with yearly up-dating and for them results to be made public record. There would be no sense of me having to go to class, get tested and licensed, yearly up-dated testing, etc. to practice tax prep. work only to have to call IRS help line and try to get answers from an un-licensed, un-certified, un-tested IRS worker. No sense at all.
If your going to play the tax game, then make it equal and honest for all who do…
Spit, I also wanted to say that besides telephone answer folks that it would make no sense of having an un-licensed, etc. IRS worker double checking my work on filed tax returns. If any thing I actually should be double-checking them if I’m the certified, licensed Tax Pro they want me to be.
Tom K,
Wow, I should pay more attention.
There are some great points being made here. Thank you for your thoughts, and as TWTP states:
“I like your thinking!
Right on!”