Hiring A Tax Advisor? Ask Your Tax Planner These Questions First

Do your due diligence before hiring a tax advisor. Here are some questions to ask your tax planner before you decide to hire them.

Thoughts On Hiring A Tax Advisor

Who’s doing your taxes this year? Are you feeling confident enough to use one of those popular personal financial software packages or tax preparation programs on the market such as TurboTax? Or are you a money expert and like to do things the old fashioned way: with a pencil and a stack of forms, schedules, tax receipts, and patience?

hiring a tax advisor, tax planner questions

Maybe you don’t trust yourself and you’d rather hire somebody to do it for you. In my case, I’ve decided that outsourcing my finances in this regard may be the way to go; still, there are a few tips we should all consider and a few questions we should ask before trusting somebody with the important task of handling our taxes.

Questions To Ask Your Tax Planner Before You Hire Them

1. How much do you charge?

How much does the tax professional charge? Say no to anybody who wants a percentage of your refund. Also avoid anybody who claims that they are a miracle worker and can get you a larger refund than other preparers. This isn’t about competition. It’s about doing things right, avoiding errors, and keeping things legal. You don’t want to cut corners: a big refund loses its luster when the audit letter arrives in the mailbox.

2. What should I expect from your service?

Determine the end result of your transaction with the tax planner. What kind of paperwork and materials do you expect them to provide you after they’ve done their job? For instance, a tax professional signs your tax return and provides you with a copy. Anybody who neglects to do so, should be avoided. Also, make sure that you never sign a blank tax form. (Better yet, don’t ever sign a blank anything!)

3. What’s your availability?

Your tax preparer should be available to you after the filing. Here today, gone tomorrow may work for the circus but not for your finances.

4. Could you provide me with some references?

It goes without saying that before you hire any professional who does any work for you, it’s best to get a hold of a few references and to double check the professional’s record at the Better Business Bureau.

It’s also a good idea to seek out a tax advisor through word of mouth: ask your friends and coworkers if they’ve used any particular CPA, Enrolled Agent or other tax planner, and how happy they’ve been with the work done for them. Nothing speaks better about someone you’re hiring than the reviews and recommendations (for the advisor) offered by your friends, neighbors and other people you trust.

It’s also good to do a little research on your own. Again, check out prospective advisors against the Better Business Bureau, state boards, and professional organizations to see whether they’re listed and have a clean record.

5. May I see your credentials?

Check out your tax planner’s credentials. Is he or she an Enrolled Agent, Certified Public Accountant, or Attorney? If so, the preparer can represent you before the IRS on all matters including audits, collections, and appeals. Other return preparers can represent you only in audits for those returns where they’re signed as your preparer. If you have a more complicated return or a return that may be a red flag for a tax audit, you may want somebody with stronger credentials. Of course such professionals will most likely charge you more.

6. Could you answer a few questions?

Before you sign your tax return, review it and ask questions. Ask enough tax questions that you’re satisfied that you have a good working knowledge of what has been presented to you. You are responsible for the information contained in the forms so make sure you feel good about the entire document.

Come to think of it, these questions are like any other you’d ask of any service professional you’re thinking of employing. But the lesson remains: if you follow these helpful hints, you’ll likely be satisfied with your tax preparer. Remember that your tax return is one of the most important legal documents that you complete each year, so don’t just go after the cheapest tax professional. Instead, find the person who offers good value — an expert you can trust, who charges a reasonable fee and whom you think you can keep turning to for a long time to come.

6 thoughts on “Hiring A Tax Advisor? Ask Your Tax Planner These Questions First”

  1. In my vetting I learned EAs know a lot more about doing your personal taxes than a CPA does. They generally charge less as well. If you’ve got a more complicated taxes a CPA might be worth your time and money.

    What I usually advise people is if they are looking to do their taxes once a year, then use a personal network to find good EAs at good prices. If you need to talk to a tax person more than once a year, a CPA might be worth your while.

    This isn’t to say EAs can’t do what a CPA can, but simply a basic rule of thumb.

    I’m like you though, I outsource my taxes. They were free this year, because they screwed mine up last year.

  2. good advise……for years I was going to a lady who worked out of her home, and didn’t charge the the “hr-block” rate, even though she worked there. She was also the mother of my son’s friend. I was shocked when one of the customers got audited, and she agreed to stop doing taxes (as requested by the IRS), and stopped answering her phone. She screwed up, in a minor ways, but totally shut down her operation, rather than do anything. (We’re talking multiple small dollar mistakes which were more alarming, than financially painful). Wrong filing status, exemptions you are not eligible for because of income, etc…short term gains listed in long term gains, etc. just multiple clear mistakes, which should have never been made. Shockingly I was just getting irked at the IRS every time they sent me a letter asking for another $200, or so…..I was shocked to hear about the others.
    I’m a professional, college educated, etc, but even my taxes have wrinkles (divorce, stocks, rentals, land lease, farm).

  3. Picking a tax preparer is an important decision and this is good advice. When you ask for their credentials, such as is the professional a CPA – you can often verify these credentials online with the appropriate licensing organization, such as the CPA society or National Association of Enrolled Agents. Also, make sure to conduct a simple search on Google for the person’s name to see what results you find, which is also an easy way to vet a professional.

  4. Michael Cantrell

    Yes, I am a State employee who is about to retire. I will be getting a considerable amount of money before the year ends. Do I check with a Tax advisor before the year is out or do I wait?

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