Things to Keep in Mind When Choosing a Tax Professional - Part 1

Choosing the right tax professional can be complicated and stressful. After all, you’re looking for a person with whom you will share your most sensitive and private financial data, and you may have a tight timeline to work with.  In the first of a two-part series,  we share some tips for consideration to make the process easier.

1. Determine what you need. If your taxes are simple enough to handle on your own, you may do fine with tax filing software. But if your taxes are complicated or you are not tech-savvy, you may need professional help. For example, if you have experienced a major life change (death, marriage, or divorce),  or have complex investments, your situation may require the help of a professional tax advisor. And depending on the complexity of your needs, that professional may be a tax preparation company, an IRS Enrolled Agent, a Certified Public Accountant (CPA), or even a tax attorney.
2. If you’re a member of the clergy, keep in mind that clergy taxes are unique. Ordained ministers have dual tax status. For federal income taxes, ordained ministers are considered to be W-2 employees. But for Social Security and Medicare taxes, they’re considered to be self-employed. This makes taxes for ministers very different from taxes for lay church employees or other workers. Make sure to consult a tax professional who has experience in clergy taxes.
3. Consult with your personal network for referral. Next, ask the people you know and trust if they can recommend a reputable and trustworthy tax advisor - especially if they’ve worked with a tax professional for some years. This personal network can be family, friends, colleagues, or other professionals. Ask these people who they can “recommend” rather than who they “know.”  Remember, the purpose of this step is to find the “right” professional and not just “a” professional. This may take more time than searching online, but it can help match you up with the right person. If you are a clergy person, ask other clergy members that you trust who they recommend that has experience in clergy taxes.
4. Check the tax preparer’s qualifications. Tax professionals like Enrolled Agents, CPAs, and tax attorneys go through extensive training and continuing education to maintain their credentials and stay current with tax law changes. In fact, CPAs and attorneys must meet education, rigorous exam, experience, licensing, and continuing education requirements. And an Enrolled Agent is licensed by the IRS and must pass an exam and meet continuing education requirements. Yet, these credentials alone do not guarantee that the professional is equipped to provide the tax services you need. In particular, CPAs and attorneys, specialize in different fields, just like doctors and health professionals. So, not all CPAs and attorneys provide tax services, and some who do may only do so during busy tax season (not all year round). Or some CPAs and professionals may specialize in tax services for corporations and large businesses only, or just for high net-worth private clients. So, you’ll need to do some homework here to ensure the professional you are considering has the right tax experience and actively practices in the field on a regular basis.  Generally, you might want to stay away from professionals who practice taxes “on the side” just to fill gaps.
5. Have an “initial consultation” discussion with the professional. Be sure to request a “discovery” discussion (live meeting, Zoom, or phone call) to ensure that you are both a good fit for each other. Through this open discussion, you can determine if the professional has the tools to meet your tax needs. And it’s also a great way for the tax professional to check if you are someone who fits their ideal client profile.
   1. In this meeting, the professional should be asking you questions and trying to get to know you as much as you are trying to get to know them.
   2. They should show interest in understanding your background and goals.
   3. If they’re not asking you any questions, there’s something wrong, and you should question whether you want to pursue their services any further.
   4. The tax advisor needs to be on the same wavelength as you and take the time to learn more about you, your family, your concerns, and your goals.

During this meeting, you can also get a feel for the office support system to determine what type of support infrastructure the professional has in place. Watch for more tips in the second of our two-part series on how to choose a tax professional in the next issue of Tomorrow.

The information contained herein is for informational purposes only.  While MMBB made every attempt to ensure that the information is accurate, MMBB is not responsible for any errors or omissions or the results obtained from the use of this information.  MMBB is not liable for any success or failure that is directly or indirectly related to the use of the information contained herein.  The information contained herein does not constitute any financial, insurance, investment, legal, or tax advice.  In no event shall, MMBB and/or its fiduciaries, directors, officers, employees, or agents thereof be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in action of contract, negligence or tort, arising out of or in connection with the use of the information contained herein.