The complete guide to your first meeting with a CPA or tax professional—and how to find one!
Just imagine: the dreaded mid-April date comes, and it’s just another day. You don’t have to stress out about your taxes anymore.
It’s because working with a Certified Public Accountant (CPA) (or other tax professional) can help you navigate all the complicated tax situations with ease.
Make this day a slam dunk – a CPA will keep your taxes in top shape all year long.
How to know you need a CPA
Sometimes, you may wonder whether you can do your taxes yourself or really need professional help. It certainly depends on the person and their various life/tax scenarios.
If you decide to do it yourself, there are many online tools and apps that can help you file for free or at a low cost. See our recommended Top 5 Tools for Taxes. The problem is, most of them are focusing on tax compliance and not tax planning.
Jeff Bezos and Elon Musk probably wouldn’t be so crazy rich if they didn’t know how to reduce their tax burden legally. Here’s when hiring a CPA comes in handy. Money loves planning – and CPA lives and breathes planning various tax situations to your (sometimes, almost unfair) advantage.
Here are some scenarios where you might need a CPA:
If you have a big investment portfolio (more than $200,000)
If you’re going through a divorce and have kids
If you have a small business or corporation and a limited liability partnership
For more detail, please have a look at Should I Hire a CPA so you can decide for yourself.
How to find a CPA
There are two things to look out for when looking for a CPA:
Preparer Tax Identification Number (PTIN) - according to the IRS, anyone who prepares or assists in preparing federal tax returns for compensation must have a PTIN
Further professional credentials that are harder to get and require ongoing education – trust us, you’re gonna want the brainy kind of CPA! Certified public accountant, licensed attorney, EA, enrolled agent, or someone who has completed the IRS’s Annual Filing Season program. For example, The Accredited Business Accountant/Advisor and Accredited Tax Preparer are the programs that help preparers meet the Annual Filing Season Program condition.
Check both to make sure you’re in good hands!
One of the best ways to find a CPA is to search the IRS directory. It will cover preparers with PTINs and IRS-recognized professional credentials, whereas volunteer preparers and preparers with only PTINs won’t be found in the system. Nifty, we know!
You also may be able to find a CPA among your friends who are part of a professional organization such as the National Association of Tax Professionals, the National Association of Enrolled Agents, the American Institute of Certified Public Accountants, or the American Academy of Attorney CPAs.
Good friends don’t give other friends bad advice so some people may be more comfortable discussing taxes in those situations.
But if your friends aren’t knowledgeable about the tax stuff, that’s OK too – we got you. Check out our Year-End Tax Planning Tips.
Some state boards of accountancy and state CPA societies have online directories of members or can give you a list of tax pros in the neighborhood if you ask. Not every CPA does taxes, so double-check online or call to make sure the people on your list can help with your particular tax situation.
And it’s always a good idea to search a CPA database to check a CPA's license status, issue, and expiration dates, as well as any potential disciplinary actions and suspensions. Better safe than sorry!
With so many things to verify, take a look at our 10 Tax Hacks for Your Busy Life for some time-saving shortcuts.
How to approach a partnership with a CPA and what to expect
To start, you will give your CPA the last year’s tax return and answer some questions about any recent changes that took place in your life (new business, new property, change in marital status, etc).
Make sure to ask your CPA some important stuff we recommend below. This is a two-way street, so don’t be afraid of asking too much and watch out for the deal-breakers!
Remember that enrolled agents, CPAs, and attorneys with PTINs are allowed to represent you in front of the IRS on audits, payments and collection issues, and appeals but preparers who only have PTINs aren’t — even if they did your taxes. Double-check with your CPA that they will have your back in those situations.
One of the most crucial things about your partnership is that your CPA must be willing to sign on the dotted line with their PTINs. Putting their name and reputation on the line for the work they had done on your return is how you know you can trust them.
How to prepare for your meeting + questions to ask
Here are some things to ask your potential CPA:
How long have you been doing taxes? If your tax return is pretty simple, someone with only a couple of years of experience will do. Look for someone more seasoned if your return involves some complicated tax situations.
Do you have any specialties? Perhaps, you own a small business or rental property, or foreign investments. In that case, try to work with someone who specializes in those areas.
How do you bill clients? The CPA is supposed to give you at least a range or an estimate of the cost — especially if you show them your last year’s return. Do they charge a flat fee or an hourly rate? Get an idea of the price of their services before you take the leap!
Who will handle my return? If the CPA has a big firm, they may hand off your return to a less-experienced colleague and just review their work. Unfortunately, this is an all-too-common scenario in various industries, so make sure to clarify things before you take a swan dive.
Can I contact you for questions outside of the tax season? Some CPAs are only available during the tax season but you don’t want to be on your own if something goes wrong after you file your return. Look for someone who won’t go MIA on you, someone who’ll have your back year-round!
Check out our advice on some other helpful long-term strategies in these posts: How to Build a 5-Year Financial Plan; How to Create Your Estate Plan; When Do You Need an Estate Attorney?
And while you’re at it, hop into your To-Do List and get crackin' on your financial plan. Remember: financial wellness is only 3 minutes a week away!