When my wife and I began to gather receipts and other scraps of paper for our taxes this year, I called our long-time accountant with a routine request for an organizer to help us make sense of all the numbers.
"I already sent it to you," the accountant hissed. But no matter how disorganized my wife and I may be, we knew we had not received that vital piece of mail.
I called her back a few weeks later with a follow-up query. "I don't really have time to handle individual tax returns this year. I've got all the business I need," she snarled. "I can't find any trained people to help me."
And so, we slowly realized the romance had vanished from that relationship. We were disappointed because our accountant had been an essential advisor during the past few years, urging us to purchase a house and to take other life-altering steps.
Now we either had to go it alone and do our own taxes, a dangerous plan for two journalists who can hardly balance a checkbook, or find another trustworthy advisor. We began by asking friends and family for references.
According to many experts, word-of-mouth is the best way to find a new accountant. Looking back on the experience, I realize we simply lucked out in finding one with as much expertise as we did, especially since we didn't know what other important steps to take.
Interview your prospects
You should meet face to face with the accountants you are considering for one of the most important roles in your life. Interview them about their background, experience, and education - just as you would a doctor or dentist, according to experts.
"You want someone who has some experience, not someone who's just starting out," said Rick Eckstein, a certified public accountant with Walter & Shuffain in Norwood, Massachusetts.
And keep in mind that the people who offer tax preparation services are varied not only in training, but also in the size of their practice. Some are solo practitioners while others are part of large firms with staff support, lawyers, and libraries that track the latest developments in tax law.
"I recommend going to a firm as opposed to going to an individual because the environment in an office is better for keeping up with new laws and regulations," said Jeff Raymond, a CPA who belongs to a firm of 40 persons, called Rosenfield, Holland, Raymon & Pielech.
"Tax law is changing every year," he added. "Constant regulations are coming out of the IRS. And there's case law constantly coming out of the courts."
Joseph Green, a CPA in Weston, Massachusetts, said most people don't need large law firms with international offices. "The trick is selecting an accountant who's intelligent, who communicates well and who you have chemistry with," he said.
Know your accounting needs
You should decide how much you want to spend on a tax return and what type of services you'll need. Some accountants will simply file the return, while others will become investment advisors who can plan your estate, retirement savings, and other complicated financial matters.
However, "if you don't need a Big Six accounting firm, then don't hire one because it will cost you," Eckstein said. "Shop within your budget."
Always ask prospective accountants in advance what they charge and the basis of their fees, whether it's hourly or by the job. The fees for a CPA may vary from $50 to $200 an hour and the costs charged by agencies like H&R Block vary widely from state to state because of varying overhead.
In addition to making sure you're personally comfortable with your accountant, make sure he or she is readily available to answer questions and give you advice.
"You should feel confident that your accountant will return your calls," Eckstein said. "Everyone here returns calls and emails within 24 hours."
Also remember that some people who sell tax preparation services aren't trained CPA's. Some have only been trained to do tax returns, but not to give financial advice.
"I've had a lot of bad experiences with H&R Block and the Tax Man. They don't ask questions that a CPA in a tax practice would ask," said Steven Elliott, a senior manager with Ernst & Young in Boston. "The biggest thing I found lacking is knowing what questions to ask."
But Frederick Roe, an MBA student in Columbia, South Carolina, who was trained by H&R Block to prepare tax returns, said the company's personnel are "perfect for some people who don't have very complicated tax returns. Not everyone needs financial advice."
Our story's happy ending: a new beginning
My wife and I did. So when we met James A. Samples, a Newton Falls-based accountant, he not only asked to see our past tax returns, but he also spent an hour going over our spending habits, investments, and future plans. "What are your goals?" he asked us, putting my head into a spin.
At first, I didn't believe an accountant would ask such an incisive question. So my response was blunt. "Survival," I said, partly in jest. But then I realized that here was an accountant who wanted to develop a relationship and help us plan our future.
Samples seemed genuinely concerned. He demonstrated in-depth knowledge of tax law and clearly had in mind an aggressive approach to keeping our tax liabilities down. He asked us a lot of questions, one of the signs of a good accountant. So we hired him on the spot.
Only later did I find out that he had a master's degree in taxation.
"It's important to use a good practitioner because there are a lot of options under the law to reduce your taxes," Raymond said.
Added Elliott: "A lot of clients try to save money by doing their own tax return or by buying stuff from the Web to help them do it. If you have a complicated return involving inheritance, a move, stock options, children in college, it's better to spend a little bit of money to have the return done by a professional."
My wife and I paid $350 for Samples' services, a bargain given our lack of mathematical acumen and the difficulty of our return. But the best part of the deal is that we found an experienced accountant who'll help us shape our financial future.
- Christopher A. Szechenyi, Salary.com contributor