Big picture retirement planning needs to consider tax, financial, legal, and health care considerations. No one can know enough about all four of these topics, so it is important to assemble a team of professionals. But it’s hard to find those professionals! Today, Devin and John talk about how to find a good tax advisor.
There are many kinds of tax professional, but there’s no specific qualification to call yourself a tax preparer or a tax advisor. If you’re looking for someone to help you with tax issues, you need to first understand the different options:
Certified Public Accountant (CPA): A CPA has to have a degree in Accounting, and sit for an examination. Taxation is just a small portion of the study to become a CPA, so just being a CPA doesn’t mean that they’re a tax professional.
Enrolled Agent (EA): These are folks who have taken a exam provided by the Internal Revenue Service. They specialize in taxes.
Tax preparers include companies like H&R Block or Jackson-Hewitt, the kiosks and booths set up in retail stores, and also volunteer organizations like the Volunteer Income Tax Assistance (VITA) program. Most of these tax preparation organizations use software, much like the software you might use at home.
Tax attorneys are lawyers who have specialized in tax issues. Some of them may prepare taxes, but being a lawyer doesn’t make them any better qualified to prepare their taxes.
Alternately, you can use the software yourself. The software is very good, and in many cases those software programs come with some sort of accuracy guarantee.
Regardless of who you pick, the important question is “What are they doing for you?”
Who is it that you need to hire and put on your advisory team? For purposes of retirement planning, you’re looking for someone who can help you plan for the future. As such, you can pretty quickly narrow your search down to an Enrolled Agent or a CPA who specializes in taxes.
Step One: Find A Few People
Talk to friends, talk to family members, ask the other professionals in your life.
Do A Little Research
Once you have a few options, take some time and investigate each one. Check whatever licensing organization to check on their credentials. Look at their website and check out their social media accounts to see if they mentioning planning or retirement.
Talk To A Few Possibilities
Once you’ve researched each one, and narrowed it down to a few, then get in touch and ask some question:
- What kind of clients do you typically work with?
- How many tax returns do you do each year?
- In the middle of tax season, will I get a return phone call if I have a question?
- Do you just prepare tax returns, or do you provide tax advice?
- What is your fee structure? (Get specific!)
Hopefully, this will help you find the best tax advisor for your specific situation.
Resources mentioned in this episode:
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Once a month, Devin and John answer listener questions. Send your questions to firstname.lastname@example.org. They can’t answer every email or question, but they sure do try!