Personal finance column: How to choose the right tax pro

Having the right professionals on your team can be critical to your financial success. However, depending on your circumstances and goals, the top experts in the Roaring Fork Valley may not be right for you. This is why it is important to do your due diligence and consider various factors when making a decision.

Here are five questions to ask when choosing a tax preparer:

1. What are the certifications?

The CPA (Certified Public Accountant) is the undisputed gold standard in the industry. However, if your situation is not complicated, it may be better to work with an EA (Enrolled Agent). EAs focus exclusively on taxes, while CPAs often handle taxes and more.

Since the professional will be performing important work and will have access to some of your most sensitive information, it is always a good idea to check if they have an active license and have any legal blemishes on their record. . Two places you can use to check are the Colorado Division of tprofessions and occupations (select “Accountancy”) and CPAverify.

2. Are they accepting new clients?

Many tax professionals in the Roaring Fork Valley are not. So, you may have to contact half a dozen to find two or three that have openings. You can also look outside the valley if needed, but you should stay in Colorado because each state has its own tax rules.

3. Are they using tax minimization strategies?

Ideally, the tax pro you end up working with will be able to capture and accurately report what happened last year while helping you implement strategies to lower your future tax bill.

The following questions can help you determine if they are a good fit in this regard:

  • Will you provide tax planning advice as part of our partnership?
  • What types of tax reduction strategies do you typically use with your clients?
  • Based on what you know about my situation, what are some tax reduction strategies you can recommend?

4. Do they work with clients like me?

You want to hire a tax advisor who works with clients like you. They are likely to be more familiar with your situation and offer a solution tailored to your needs.

For example, if you are a high earner with limited savings, investment income and a rental property, your CPA should understand these internal and external issues. Alternatively, if you’ve just inherited property and are trying to minimize your tax bill while being fully aware of all the tax implications, you need a tax professional.

Here are some questions to ask yourself:

  • What is the stage in your life or work?
  • What are the different types of income, sources and funds?
  • Are you self-employed or own a business? How is the business structure?
  • How much is your wealth?

Once you understand some of the important characteristics that determine your financial position, you can look for a tax professional with relevant experience and knowledge.

5. Do they feel worthy?

Once you’ve found a tax professional who meets your technical needs, make sure they’re also someone you like and trust. Even if the pro you choose doesn’t need to be a close friend, it’s easier to develop a strong relationship with someone who matches your personality.

Additionally, if you currently work with a financial advisor or wealth manager, consider asking for tax advice. Many financial professionals have close relationships, and your financial advisor may have at least one tax specialist they can recommend. Ideally, your financial advisor and tax professional will work together to ensure that the strategies they implement are in line with your financial goals.

Brian Littlejohn, MBA, CFP®, CFA is the founder of Sherwood Wealth Management in Basalt. Brian provides his clients with personalized investment management and comprehensive financial planning services to help them organize, grow and protect their assets.


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