Five signs you’ve chosen the right accountant; two signs that suggest proceeding with caution.
Not everyone needs a professional in their corner come tax season. For some, tax software might do, perhaps followed by a professional review. But for those with K-1s to contend with from master limited partnerships; complicated business structures; income from multiple states; major life transitions; or other prickly tax scenarios, a strategic, knowledgeable numbers pro may be valuable when it comes to tax planning, as well as preparing and filing your personal or business taxes.
Here are a few signs that you’ve found the right professional and two that may indicate it’s time to reevaluate. These aren’t hard-and-fast rules, merely guidelines. Don’t forget that your advisor likely has relationships with accounting professionals and can let you know what to expect, so tap into that experience if you need to.
Your accountant should be proactively leading the tax strategy conversation, collaborating closely with your other professional advisors. Just expect those in-depth discussions to happen before or a bit after the hectic 13 or so weeks that comprise tax season. They’re only human.
Your accountant should have experience in your particular situation and be capable of thoroughly researching rarer issues. Invest in private companies? Your accountant should be familiar with K-1s, notoriously tardy reporting documents for partnerships that often demand specific expertise and amendments or extensions beyond normal tax-filing deadlines. Work in a particular industry or run your own business? Dealing with foreign affairs or global investing? Experience is vital in these complex arenas. It helps, too, if your values align with the person who’ll know every detail of your financial life.
Your accountant should have their fingers on the pulse and ear to the ground. The laws surrounding personal and business deductions change frequently (see the Tax Cuts and Jobs Act of 2017), so an accountant should be well-versed in ways to help you legally maximize your return (e.g., bunching charitable contributions in order to exceed the $29,200 standard deduction for married couples filing jointly, in 2024). Expect your accountant to be up to speed on regulatory changes as well as current tax law, and to keep you informed in language you understand.
You’ll likely want to work with someone who has been vetted and recommended by people you know well and trust. Consider an accountant who is part of a professional organization (e.g., the AICPA) with continuing education standards and qualifications or has certifications in the type of service you need.
Your accountant should be responsive, responsible, trustworthy and transparent. He or she doesn’t have to be an expert in everything, but should be able to research an issue and get back to you as needed. Prompt, honest communication paired with a proposed solution is what you’re looking for. This is a relationship that should last, so it’s important to build on a strong foundation.
They have their head in the sand.
They do not have secure systems in place to keep the practice going in case of emergency or to protect your private information.
They’re an artful dodger.
If you’re working with an accountant who suggests something that sounds more like dodging taxes rather than minimizing them, look elsewhere. You don’t want to be on the wrong side of the law or the ledger.
Sources: inc.com; entrepreneur.com; investopedia.com; irs.gov; accountingweb.co.uk
Raymond James and its advisors do not offer tax advice. You should discuss any tax matters with the appropriate professional. All expressions of opinion reflect the judgment of Raymond James & Associates, Inc., and are subject to change.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation.
