Choosing the right tax professional can be complicated and stressful. After all, you’re looking for a person with whom you will share your most sensitive and private financial data, and you may have a tight timeline to work with. We share some tips for consideration to make the process easier.
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6. Determine the professional’s availability. In the initial discussion, determine their responsiveness by attaining answers to the following questions:
a. How available to you are they? How often can you seek their guidance?
b. How quickly will they respond to your questions? What is their communication process and medium?
c. Do they communicate by phone, Zoom, email, or in-person meeting? Are they available for tax guidance only during tax season or all year round?
d. Will you be working with them directly or through their support professionals?
It’s great if a tax advisor is well qualified in terms of credentials, knowledge, and experience, but if they’re not available to you when and how you need them, their skills won’t help you much.
7. Determine a style match. Ensuring that their working style fits your needs is also critical.
a. For example, do they communicate with you the way you desire (whether it is email, phone call, Zoom, or in-person meeting)?
b. Do you prefer the professional’s communication to be proactive or reactive?
c. Do you prefer someone who speaks in very technical tax jargon or someone who can speak in simple layperson’s terms?
d. Do you prefer someone who spends a lot of time with you explaining every step of the filing process and explaining the calculations, or do you prefer someone who is more direct and just tells you the end-result?
In the end, if you are planning to work with this person for a long time, your styles need to match.
8. Confirm fees. Make sure to establish the fees upfront. You will likely pay a flat fee based on the complexity of your tax return, or you may pay an hourly rate. Also ask if the fees include follow up meetings, calls, and emails. It’s good to understand what’s included and excluded as much as possible before you officially sign on for their service. The goals here are to best understand upfront the fee structure and establish a common understanding: It is not to find the cheapest service provider. Cheapest is not always the best, and you don’t want to select a tax advisor based on price alone.
9. Look for red flags. Stay away from preparers who make big promises of large refunds before they have even examined your financial information. Remember, if it sounds too good to be true, it most likely is. Another obvious red flag is how they charge fees – avoid tax advisors who charge a percentage of your refund. Fees should be either flat or an hourly rate. Also, never sign a blank tax return since this could be a sign of potential fraud. Tax preparers are required by law to sign the return and include their Preparer Tax Identification Number (PTIN). In addition, be careful about tax preparers and fly-by-night tax services who don’t seem to have any permanent business presence.
10. Apply the “trust” test. Assuming the tax advisor has passed all the checks above, the last screen is the “trust” test. Does your gut feeling tell you this professional is someone you can comfortably work with and rely on? Does the professional appear to understand you, care about your needs, and look out for your best interest? And at the end of the day, do you feel like you can trust this person with your information, your concerns, and your goals? Ideally, the relationship needs to be founded on common trust. Apply this gut check and ask yourself how comfortable you feel about entrusting this person with your financial information and tax needs.
Managing your tax needs can be very difficult work. Working closely with a trusted tax professional, you can better navigate the complexities and ease the pain.
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