I pay someone else to prepare my taxes. I’ve done this for the last eight years or so. As my tax situation — business arrangements, investments — became more complex, I realized I needed help. Paying someone else to take care of the taxes has been great because it saves me time, and as we all know, time is money.
Last year, though, I came to the realization that I need to hire a new tax accountant. There were small signs along the way, but the fact that I ended up with an extra bill for $1,200 due to an accounting mistake was the final straw. Here are three warning signs that you need a new tax accountant:
1. Your Accountant is Slow to Respond
It’s true that during tax season you do need to be prepared to wait. Any accountant is going to be slammed. (Although there’s nothing wrong with messaging you back to acknowledge your question and letting you know it’s being looked into.)
However, your accountant should get back to you in a timely manner. If your accountant keeps putting you off, or if you don’t feel valued, you might need to find someone new.
2. You’re Not Getting Helpful Advice
The reality of the situation is that your tax accountant is supposed to be helping you with proactive, helpful advice. Most of the people in the accounting office can enter information into the software and prepare your return. The point of having a tax accountant (in addition to having someone else do the paperwork) is specialized knowledge.
My old accountant didn’t realize when the change was made to allow for student loan interest deductions beyond the original time limit. I had to bring it up since I’d been paying attention because of my work and my interest in the situation.
If you aren’t getting helpful advice that you can’t come up with yourself, maybe it’s time to move on.
3. Representation Isn’t Included
Finally, you want to know that representation to the IRS is included in your tax preparation. While your tax accountant isn’t liable if the information in your tax return is wrong, most good accountants will help you with an audit, whether new information just needs to be mailed in, or whether someone needs to meet with an IRS representative.
I know someone whose shady accountant fudged some numbers and then charged extra to talk to the IRS. If your accountant won’t go to bat for you, consider looking for someone else. You want to know that your accountant, who should be familiar with your business and your tax situation, will represent you as part of the package.
Just because an accountant doesn’t work well with you doesn’t mean that s/he is shady. But s/he might not be the right tax accountant for you. I’m switching to my friend Eric’s services this year because he understands my situation, and he specializes in working with solopreneurs and freelancers. Plus, I got worried after my last tax accountant seemed unable to manage a two-state return.
Review your accountant’s performance this year. If it doesn’t stack up, consider looking for a new accountant.
