Tax season is here again, and for many of my clients, that means it’s time to reach out to your CPA – or to find one if you haven’t yet!
But if you are looking for a (new) accountant, what should you ask him or her?
Here are some questions to get you started, and I reached out to a few of the CPAs I know to see what they would say.
Question #1: Are you taking on new clients?
This is pretty important during tax season, some will say either say no or yes but only if you agree to go on extension. That’s not a bad thing, but better to not be surprised!
Question #2: Who is your typical client? How would you describe them?
Many CPAs won’t have a “typical” niche or client that they’re looking to work with. However, if you have something unique about your tax situation, it’s worth asking if any of their other clients have similar financial considerations. Some examples of these might be:
- You’re already retired
- You have rental properties
- You have a second home
- You’ve recently inherited a lot of money
- You run your own business
- You have foreign (outside US) income
Question #3: How much do you charge?
Best to get this out of the way! The answer is likely to be “it depends on complexity” but many will provide their average cost per tax return. I’ve noticed that some CPAs are starting to provide an average cost per return or even a calculator on their website. The calculation is usually based on the number of tax forms and schedules required for your situation.
Prices might vary from a few hundred to a few thousand dollars, so it’s best not to be surprised. (And of course, your Manhattan CPA is typically more expensive than the one out in the burbs!)
Question #4: Can you help if I get audited?
Your CPA should be willing to help you with audits and response letters. Most audits are informal, but finding someone who’s willing to help you through a formal audit is a must. The cost might be included in the service if they prepared the return, or they might offer “Audit Protection” for an additional fee.
The above are the most basic questions. You may have many more if you own a business or certain investments.
Here are some other questions a good CPA can help with that I hear fairly frequently:
- I have a small business. Should I be structured as an LLC or S-Corp?
- Is it better for business owners to pay themselves on payroll or through an owner’s draw?
- I have stocks I’ve held for a long time, but I don’t have great records showing their cost basis. Can you help me with that?
- I have a small business. Can I hire my child (or other family member)?
An accountant may provide a general answer to questions like these, but more than likely they’ll need to dig deeper into your specific situation before providing advice.
Do you need help finding a CPA? Reach out! I’d love to send you a few referrals for tax professionals I work with regularly and trust.