The need for a CPA, or any tax preparer for that matter, will depend on your tax situation. More straightforward filings will likely not need the knowledge of a CPA, but more complex tax situations like facing an IRS audit will surely require the services of an professional.
What is a CPA?
A CPA is an accountant who has passed the licensing requirements of a state. To become a licensed CPA, an applicant must meet the minimum requirements, which include passing the Uniform Certified Public Accountant Examination, 150 hours of college education, and a year’s worth of relevant activities.
You will most likely need a CPA if you are a high net-worth individual. A CPA will be able to advise you better than an accountant or a tax preparer can. If you’re running a business, it is advisable to have a CPA on your side to help you come up with a long-term tax plan.
Another reason you need a CPA is to avoid tax scams, which include actions taken by shady tax preparers like guaranteeing inflated refunds. The IRS has a list of tax scams that a reliable CPA can help you avoid.
If you’re looking for a competent CPA, the following tips can help you get it right the first time.
Make a List
Compile a list of potential CPAs by asking for referrals and checking directories. You can ask family, friends, and business associates about the CPAs they work with. The IRS has a directory of qualified PTIN holders that you can check. While this list includes just about anybody with a PTIN, the list also has a directory of CPAs, enrolled agents, and tax attorneys. You can use search by zip code, so finding the ones nearest to your location won’t be a problem.
You may also check with CPA boards and societies as many maintain online directories for their members. For instance, the American Institute of Certified Public Accountants maintains a directory of CPAs with verified credentials. It advises, however, that to confirm that a CPA has an active license, contact the local state board of accountancy.
Narrow Down Options
Once you’ve completed your list, it’s time to narrow it down to the ones that best fit your tax situation. You can begin by first checking your candidate’s credentials. If you’ve got the CPAs name from the directories we previously mentioned, then there is no need. But referrals from friends may require some verification with the local state board or the IRS.
Once verified, you may also want to know what others think of that particular CPA. This is where user reviews become useful. You may want to check for online reviews on Yelp, Google, or Facebook to see if there are red flags you should watch out for. If you see a pattern of complaints, you may want to move on to the next candidate.
Meet Up
After checking everyone’s background and credentials, it’s time to sit down and discuss your needs. Important topics you could discuss with your candidates may include their tax preparation background, their availability in case something goes wrong, and how they bill. Do they charge a flat rate or hourly? Remember to bring a copy of your latest tax return, so they can give you an idea of their fees.
You’d also want to ask them about their knowledge. This last tip is useful if you’re part of a particularly unique industry with complicated tax requirements. The one that is knowledgeable about your business would do a better job of advising you over those who are not.
Need Professional Help with Your Tax Returns?
If you need professional help, our experienced CPAs can guide you in the right direction. Contact us today at 818-452-2641 or fill out our contact form to schedule a free consultation.
