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Tips on How to Evaluate a CPA Relationship

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Tips on How to Evaluate a CPA Relationship

When was the last time you were set up on a blind date and met a real Prince? (Congratulations Meghan and Harry). Although referrals don’t always turn out to be the right fit, getting a CPA referral from a friend has its benefits. Finding the right CPA shouldn’t be such a royal pain. You are trusting this person to help guide you in your financial future so be sure to take your time and get to know them. If you are in the midst of looking for a CPA, below are some tips on how to evaluate a CPA relationship. 

How do I find a CPA that is right for me?

Referrals are usually your best source for finding a CPA. A family member, co-worker or neighbor may point you in the right direction. Your financial advisor may also recommend a CPA or provide in-house tax preparation as part of their advisory offering. In most situations, we recommend working with a CPA that is separate and independent from your financial advisor for two reasons: one, it is most important to work with a CPA that specializes in certain areas related to your financial situation, and those areas of focus likely differ from your advisor’s other clients; two, be wary of competitive investment management fees that include accounting services. Remember, you get what you pay for. 

Related: The Easiest Way to Get out of Financial Balance

How much should I pay?

Tax professionals typically charge in one of the following ways:

  • Flat fee per form
  • Fee based on prior year’s cost, adjusted for changes
  • Hourly rate
  • Flat annual fee
     

Some CPAs will have different fee schedules that can be adjusted based on your needs.  One of the CPAs we spoke to said that a good CPA will let you know when it is more cost effective to pay an annual fee versus an hourly rate.  

What other things should I consider?

Preparation and filing are not the only services that should be considered. A good tax professional can offer additional services such as identifying savings strategies for the self-employed or record keeping tips to lower your tax liability in future years. 

One service that should not be overlooked is assistance in determining quarterly taxes due and, if so, calculating payments. Additionally, a good tax professional should be open to speaking with your financial advisor (and vice versa) for year-end planning. 

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