Getting Value from Your Tax Preparer

Getting Value from Your Tax Preparer

Happy New Year!!! It may be one of the most used phrases in the United States, but it is nonetheless a true sentiment. We wish for you and all your family a happy and prosperous new year. 


To prove our commitment to your success, we have prepared a few tips on how to best benefit from the services of your tax preparer. And yes, that even includes us or whatever CPA you may be using. 


First of all, we want to reassure you of something; CPAs are bound to full disclosure regarding the use of any third-party provider of services like outsourcing, using payroll services, etc. Bottom line is if you have a question about any CPA's use of third party service providers, just ask and you should get an honest answer. We certainly will provide you with accurate information and we have no reason to believe our colleagues wouldn't do the same.


The first key to getting the most value from a CPA is organization. The less organized your information is when you visit your preparer, the more time we have to spend looking for necessary information in the stack of papers you bring to us, the less time we will be able to concentrate on the implications of the data you bring. Of course, this translates into fewer suggestions we can offer to help you through the year.


One way of organizing tax data is by using the tax organizer you get from the CPA. Oh sure, they're long, take time to complete and generally seem like useless paperwork. The fact is, though, that the more you include on the organizer, the less time the tax preparer will spend hunting down information.


Let's take a look at a typical organizer and discuss a few features. Most organizers will have a section that seems to ask a whole lot of personal questions. Please, make sure you answer the questions completely. This helps the CPA ask the right questions as the preparation process moves forward. For instance, suppose you paid student loan interest in the past year. Saying yes to the question, "Did you pay any student loan interest this year," alerts the CPA that there should be information in the organizer showing the amount of student loan interest to be paid. If you paid interest but don't answer the question, the deduction may be missed, especially if you forget to supply the information on amount in your organizer. Please fill out all the questions in your organizer.


Typically, the organizers will include pages confirming your name, address, etc. along with the same information with respect to your spouse and children, if applicable. Then there will be a series of pages asking for information on income, business expenses and other deductions. Completing these and attaching the related support (W-2s, 1099s, copies of K-1s from partnerships, etc.) will greatly increase both the accuracy of your return and the speed with which the CPA can complete your return. This minimizes the fees you are charged for the preparation of your return.


One final note regarding tax organizers, some organizers include questions about your income expectations in the future. This is critical information that tells the CPA how to address any possible 2005 tax estimates and that there may be a need for more in depth tax planning for 2005 and beyond.


When you first sit down with your CPA, the organizer will take the place of an agenda. You should expect your answers to some questions will elicit a deeper discussion about your financial matters. Don't rely on the CPA to know everything about you, take the initiative and ask any questions you may have about your tax situation and other financial matters. While using a CPA to prepare your return is valuable in itself, the greatest value you can receive from a CPA's services comes from suggestions for future income enhancement and tax savings strategies. 


If you are like many taxpayers, you really don't want to face the task of putting your tax information together. Don't wait until a day or two before April 15 to give your CPA your tax information unless you plan on extending the return. Unless the return is very easy, you run the risk of not getting it by April 15, but more importantly, you give the CPA no time to evaluate what she/he is putting on the return for potential tax savings. This work can be done later, but you should expect to pay for the service.


The second time you sit down with your CPA should be when your return is complete. In this case, the return itself will serve as the agenda. Just like the first meeting with your CPA, you should ask any question you feel is pertinent to your financial health. With financial matters becoming more and more complicated, there are no insignificant or inappropriate questions.


Now here's a hard statement for many of us to make, but we will do it anyway. Think hard about accepting your CPA's suggestion when he or she suggests additional services that can be performed in the off-season to save you taxes. It's hard to say because it sounds self-serving, but the reality is that most of us CPAs genuinely have your best interests at heart. Not only is it part of our nature, it's also good business.


We have your best interests at heart when we prepare your tax returns. It's our job to make sure those returns are complete and as accurate as possible. It is also our job to identify tax saving opportunities where they exist. The best possible thing you can do for yourself and your CPA is give him or her organized documents with which to work and enough time to allow for adequate consideration to tax saving opportunities. Please give us a call if you find that you need assistance in properly completing your tax organizer or if you find you have any questions concerning your tax situation.