The Accountant: What Makes A Good One?

Telling Tips is a series of articles from local experts to help you save money, make better decisions and plan for a better future.

We tend to view our accountants like we do doctors – we trust them without question. This is a good choice in some cases, but a bad one in others.

If you give them poor information or don’t make the necessary effort, you are going to get corresponding poor results. How many vacations are a disappointment because the trip planner didn’t check on attraction times or what the weather is usually? Just because there is a computer program or app that will help you complete your taxes, it doesn’t release you from making sure you understand the choices you make with that program. Most taxpayers, other than those filing Form 1040EZ, will probably benefit from the expertise and advice of a paid income tax preparer.

The first question is: Do you need an accountant?

The second question is: What can an accountant do for you?

The third question is: Is your accountant cutting the mustard?

Do you need an accountant?

Not every taxpayer will need to pay someone to prepare their income taxes. However, many times tax information that needs to be reported is too complex for an individual or business to handle. Some guidelines to follow in determining whether you need a paid tax professional are as follows:

  • You read about a tax credit, think you qualify, but do not know how to claim one. You do not understand how to figure the amount.
  • You receive income from many different sources.
  • You own rental property and have related expenses and income that you do not know how to handle.
  • You have read the income tax laws that affect you, but you still do not understand them.
  • You operate a business and have many expenses that you think qualify as deductions. However, you do not understand how to report them on your income tax return.

What can an accountant do for you?

The benefits of paying for income tax preparation include:

  • Paid tax preparers are expected to know the income tax laws.
  • Paid tax preparers can be responsible for any errors found on your income tax return. By knowing the tax laws, they can help you save tax dollars.
  • They can help you plan for any future income tax liability.
  • They can save you much time and frustration.
  • They can save you from any IRS contact regarding your tax return.
  • By designating them as a third party designee, your paid preparer will be your source of contact whenever the IRS has any questions regarding your tax account.

Is your accountant cutting the mustard?

The mustard is the amount of tax you pay. You should retain an accountant for advice and tax strategies. If you are lazy, you can use them for filling out tax returns as well, but you need to understand the tax software offered on the market today is pretty proficient doing this.

The fundamental question of whether you have a proactive or reactive accountant.

A reactive accountant is someone who sends you a letter of questions to answer so they can fill out your tax return for the year. There is no discussion of tax strategies or adjustments that can be made to slash your tax bill. One has to wonder what exactly you are paying for?

A proactive accountant is one who is looking out for your well being. This is a professional who keeps you informed throughout the year of tax changes and gives you ideas, and who requests you meet whenever you have any change in your financial situation.

Obviously, you are going to pay more for the proactive accountant, but your benefits will greatly outweigh the cost.

Is your accountant cutting the mustard?

Joseph Reisman, of Joseph S. Reisman & Associates, has been serving tax prep and business accounting expertise from his Coney Island Avenue office for more than 25 years. Check out the firm’s website.

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