Welcome to the electronic age.
It's entering every area of our lives, including taxes.
With all the tax preparation software available to us these days, many don't even bother hiring a tax preparer.
Do It Yourself Tax Return If you are computer savvy and have a very simple financial life, you may be fine doing it yourself.
Still, I would encourage you to actually calculate your return using a couple of different programs (try those available for free).
You will be surprised at the results.
When I last did it, they all calculated a different amount of refund! To be sure you are working with a reliable program, select it from the IRS website and use the ones IRS endorses.
More Complex Tax Returns In each person's life or business there comes a point where doing it yourself just isn't an option anymore.
The new level of complexity in your financial life requires a professional.
What then? Where do you turn? Most of us simply ask around among friends, acquaintances or business associates.
And that's fine.
You may find a tax preparer who is perfect for you that way.
But tax law is a very big field and you may need expertise your friends don't need.
While they are happy with their tax accountant, he or she may not be the best fit for you.
In most cases an average person actually doesn't know whether their tax preparer is good or not.
We simply don't have the knowledge to test their level of skill.
Selecting a Tax Preparer Selecting the right tax preparer is not much different from selecting the right bookkeeper for your business.
Unless you are an accountant yourself, you will not know how to do it.
You may be able to find the right person from the point of view of work ethic, personality, etc, but the core of the selection process is aimed at finding out whether they are capable of doing the job.
How can anyone effectively do that unless they know the field as well as or better than the person they are interviewing? This is the challenge so many small business owners face and the reason so many bookkeepers are performing way below the necessary standard in majority of small businesses.
The selection process just wasn't what it needed to be.
And there is no ongoing training and supervision.
All that can change when you hire a part-time Controller.
The same can be said for tax professionals.
Errors on tax returns go undetected for years unless there is an audit or a new tax preparer takes over and reviews the past returns to find and an amended one will be needed.
One Professional Selecting Another This is what I do for my business clients - I take their latest tax return and set up several interviews with the tax preparers in the area who will be glad to review the tax return as part of the interview process.
I make notes on what they notice and make my recommendations to my client who then makes his or her decision.
I am not a tax accountant myself, but as a former Controller I have enough tax knowledge to have an intelligent conversation about the subject matter and ask the right questions.
The same goes for the field of business law.
It's part of the job of a Controller to surround himself with competent advisers in those areas.
It's not enough to say - "you should always hire a CPA".
One CPA is not equal to another.
The title itself, although very important, isn't enough.
It's as if you said to someone - "You want your teeth fixed? You have to go to a dentist".
That's obvious.
but the range of skill, professionalism, experience and personal integrity varies among CPAs as it does among members of any other profession.
Time Will Tell...
For me, the best test of quality of service is time.
If someone has gained a solid professional reputation among his or her peers over a period of time, I can be reasonably sure that I can safely recommend them to my clients.
The only other ingredients of my client's final decision may be personality and style.
It's entering every area of our lives, including taxes.
With all the tax preparation software available to us these days, many don't even bother hiring a tax preparer.
Do It Yourself Tax Return If you are computer savvy and have a very simple financial life, you may be fine doing it yourself.
Still, I would encourage you to actually calculate your return using a couple of different programs (try those available for free).
You will be surprised at the results.
When I last did it, they all calculated a different amount of refund! To be sure you are working with a reliable program, select it from the IRS website and use the ones IRS endorses.
More Complex Tax Returns In each person's life or business there comes a point where doing it yourself just isn't an option anymore.
The new level of complexity in your financial life requires a professional.
What then? Where do you turn? Most of us simply ask around among friends, acquaintances or business associates.
And that's fine.
You may find a tax preparer who is perfect for you that way.
But tax law is a very big field and you may need expertise your friends don't need.
While they are happy with their tax accountant, he or she may not be the best fit for you.
In most cases an average person actually doesn't know whether their tax preparer is good or not.
We simply don't have the knowledge to test their level of skill.
Selecting a Tax Preparer Selecting the right tax preparer is not much different from selecting the right bookkeeper for your business.
Unless you are an accountant yourself, you will not know how to do it.
You may be able to find the right person from the point of view of work ethic, personality, etc, but the core of the selection process is aimed at finding out whether they are capable of doing the job.
How can anyone effectively do that unless they know the field as well as or better than the person they are interviewing? This is the challenge so many small business owners face and the reason so many bookkeepers are performing way below the necessary standard in majority of small businesses.
The selection process just wasn't what it needed to be.
And there is no ongoing training and supervision.
All that can change when you hire a part-time Controller.
The same can be said for tax professionals.
Errors on tax returns go undetected for years unless there is an audit or a new tax preparer takes over and reviews the past returns to find and an amended one will be needed.
One Professional Selecting Another This is what I do for my business clients - I take their latest tax return and set up several interviews with the tax preparers in the area who will be glad to review the tax return as part of the interview process.
I make notes on what they notice and make my recommendations to my client who then makes his or her decision.
I am not a tax accountant myself, but as a former Controller I have enough tax knowledge to have an intelligent conversation about the subject matter and ask the right questions.
The same goes for the field of business law.
It's part of the job of a Controller to surround himself with competent advisers in those areas.
It's not enough to say - "you should always hire a CPA".
One CPA is not equal to another.
The title itself, although very important, isn't enough.
It's as if you said to someone - "You want your teeth fixed? You have to go to a dentist".
That's obvious.
but the range of skill, professionalism, experience and personal integrity varies among CPAs as it does among members of any other profession.
Time Will Tell...
For me, the best test of quality of service is time.
If someone has gained a solid professional reputation among his or her peers over a period of time, I can be reasonably sure that I can safely recommend them to my clients.
The only other ingredients of my client's final decision may be personality and style.