Accountant

How to choose the right tax accountant

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A quality tax preparing accountant saves you time and money. In today’s post, we look into how you can pick the best accountant for your business or personal tax needs.

Ask For Recommendations

Many of your peers have accountants. Ask them where they go. Why?

Because, like any professional, most accountants have particular niches. They might specialize in helping freelancers with their taxes or focus on sorting the finances of a larger corporation.

Asking your peers is the easiest way to sort through the clutter to find an accountant. Imagine you wanted to find a doctor for your foot pain. You likely want a doctor that specializes in foot pain instead of one that specializes in hands.

It’s no different with accountants. Ask around; the best recommendations come from satisfied customers that have a similar set of needs as your own.

Prioritize Location

You want someone who understands your tax situation and can handle everything you may throw at them.

This is easier if you can communicate with them face to face. Sure, you could work with someone remotely and they might be able to help you figure out your taxes, but especially for freelancers and those in similarly complicated tax situations

Find Out If They’re Qualified 

So how do you find out your potential accountant’s qualifications?

Start by asking for a Preparer Tax Identification Number. Anyone who prepares or assists in preparing federal tax returns for money must have a PTIN. Not only does this help you determine your potential preparer’s qualifications, but also, that number is required in order for the accountant to file your taxes on your behalf.

Now, it isn’t that hard to get a PTIN, so you’ll want to ensure that your potential tax preparer has one of the following qualifications:

  • CPA – Certified Public Accountant

  • Law license

  • Enrolled agent designation

Be sure that your accountant, at a minimum, has a Certified Public Accountant (CPA) license. Even though it is technically not a requirement, the process of getting a CPA license is reasonably strict and requires that your accountant have a bachelor’s degree to even sit for the exam. If you happen to get audited, you’ll need a tax preparer with one of the above qualifications  for them to represent you if you get audited

Beyond the  PTIN number, degrees, and certification, you’ll also want to know how many years of experience they have filing taxes.

If you have a simple return, you require less experience. For those with complicated or unclear tax returns, you’ll want someone who has been navigating the system for longer.

Find Out How Much It’ll Cost You  

The average accountant can cost between $100 and $175 an hour.

That can be a lot for a small business owner or freelancer. There are some things you’ll want to ask about before meeting with an accountant. In 2018, the average fee for preparing a tax return including an itemized Form 1040 with Schedule A and state tax return was $294.

Most of the best accountants charge an hourly rate but will look over your prior year’s taxes for free, or offer you a free consultation to start. Take these offers, as they will help you select the right fit for your tax needs.

Also, note their hourly rate if you get audited. You can expect to pay a qualified accountant $150/ hour to represent you if you’re audited.

Ensure They’ll E-File  

This is simple. Every accountant should be e-filing at this point. The IRS requires any paid preparer to e-file if they do more than 10 returns. If they aren’t e-filing, maybe they’re not as experienced as you would like.

IRS Announces 2017 Filing Season Date

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

2016 Year-End Tax Planning

 

Download our 2016 year-end tax planning guide for free! 

By Tax News

The Internal Revenue Service (IRS) has announced that the next US tax season will begin on January 23, 2017, and reminded individual taxpayers claiming certain tax credits to expect a longer wait for their refunds.

More than 153m individual tax returns are expected to be filed in 2017, and the agency expects more than four out of five will be prepared electronically using tax return preparation software.

Many software companies and tax professionals will be accepting tax returns before January 23 and then will submit the returns when IRS systems open. While the IRS will begin processing paper tax returns at the same time, it was stressed that there is no advantage to filing tax returns on paper in early January instead of waiting for the IRS to begin accepting e-filed returns.

The IRS said it anticipates issuing more than nine out of ten refunds in fewer than 21 days, but reminded taxpayers that it is now required to hold refunds claiming the earned income tax credit and the additional child tax credit until February 15.

In addition, the IRS said it will take several days for these refunds to be released and processed through financial institutions. Factoring in weekends and the President’s Day holiday, the agency cautioned that many affected taxpayers may not have actual access to their refunds until the week of February 27.

“For this tax season, it’s more important than ever for taxpayers to plan ahead,” IRS Commissioner John Koskinen said. “People should make sure they have their year-end tax statements in hand, and we encourage people to file as they normally would, including those claiming the credits affected by the refund delay.”

The filing deadline to submit 2016 tax returns will be April 18, 2017, rather than the traditional April 15 date due to a weekend and a holiday.

Paul S. Herman CPA, a tax expert for individuals and businesses, is the founder of Herman & Company, CPA’s PC in White Plains, New York.  He provides guidance and strategies to improve clients’ financial well-being.

Protecting taxpayer confidentiality

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

By Bankrate

Protecting taxpayer confidentiality

Lawyers are held to higher standards than CPAs. Above, actor Bob Odenkirk, who stars as Saul Goodman in Better Call Saul, promised confidentiality to his client Walter White in Breaking Bad. Amanda Edwards/Getty Images

Fans of television’s favorite ethically challenged criminal lawyer Saul Goodman know that despite his many questionable actions, he definitely respects attorney-client privilege. He told Breaking Bad’s meth-making kingpin Walter White upon their first encounter, “Put a dollar in my pocket” to become a client and ensure that anything said between the two remained confidential.

Does the same apply to accountants? The question came up after the New York Times talked with Donald Trump’s apparently chatty former tax accountant.

Follow the (tax) code

Technically, accountants do not have the same legal constrictions, or protections depending on your point of view, as lawyers when it comes to client privacy.

But the Internal Revenue Code specifically says it is illegal to disclose a taxpayer’s information without that filer’s consent.

Section 7216 of the code says that as a general rule, any person who is “in the business of preparing, or providing services in connection with the preparation of, returns of the tax” is prohibited from “knowingly or recklessly” disclosing “any information furnished to him for, or in connection with, the preparation of any such return.”

Costly penalties for violations

That code section then notes that if a tax professional uses such taxpayer information “for any purpose other than to prepare, or assist in preparing, any such return,” that person has committed a federal misdemeanor and could, upon conviction, be fined as much as $1,000 or a receive a jail term of up to 1 year or both, plus court costs.

In addition to the criminal sanctions for improper disclosure of a person’s tax info cited in Section 7216, the U.S. Code also covers civil treatment of such releases in section 6713.

Under this section, improper use of tax info could bring a penalty of $250 for each such disclosure, with a maximum penalty per year of $10,000.

Specific CPA guidance

The American Institute of Certified Public Accountants, or AICPA, is the primary member association for the accounting profession. As such, it sets ethical standards for its members.

When asked about its member CPAs’ nondisclosure responsibilities to clients, the AICPA cites the U.S. code sections that address this issue.

The AICPA also has established its own ethical standards for the profession.

Its code of professional conduct specifically states that “a member in public practice shall not disclose any confidential client information without the specific consent of the client.”

Keep your mouth shut

Of course, such a stance does not, notes the AICPA, affect in any way an accountant’s obligation to comply with a validly issued and enforceable subpoena or applicable laws and government regulations.

But basically, when you share your tax information with an accountant and it’s all above board, you should expect that information to remain between just you and your accountant.

Or, as Amit Chandel, a CPA in Brea, California, told me: “We may not have attorney client privilege, but we have ethical standards to uphold and a fiduciary duty to keep our mouth shut most off the time.”

Are you comfortable sharing your tax details with your tax pro? Would you consider switching your tax preparation tasks to an attorney to get tighter client confidentiality coverage?

Paul S. Herman CPA, a tax expert for individuals and businesses, is the founder of Herman & Company, CPA’s PC in White Plains, New York.  He provides guidance and strategies to improve clients’ financial well-being.

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.