Michael on March 26th, 2008
Bookmark and Share

I was chatting with an old friend yesterday and–I swear I am not making this up–we started talking about how to know if you have a good tax preparer.

You: Are all your conversations this pathetic?

During normal business hours?

You: What? Oh, wow.

The topics may seem uninteresting, but a different take on a mundane matter often leads to an intriguing dialogue. Or at least that’s why I think people still pick up the phone when I call.

Here are the top three things good tax preparers do that many others do not:

1. Ask to see your prior year tax returns.

You: Isn’t that, like, cheating?

I do like your healthy skepticism, but in this case, no, it isn’t like cheating. A good tax preparer reviews your previous tax returns to check for any information which could help him lower your tax bill this year. He also should review your return to see if anything was missed last year.

You: Why would that even matter now?

If he finds something significant, you could decide to amend your prior year’s tax return and receive the additional refund you were entitled to.

2. Make suggestions for next year. And for this year.

Upon preparing your tax return, a good tax preparer will notice and share several opportunities for you to improve both your tax and overall financial situation. If you aren’t receiving this kind of feedback, you’re overpaying for tax preparation because you’re effectively only receiving clerical support. Recent tax and financial opportunities we’ve noted and subsequently shared with our individual clients include:

  • Lowering their 2007 taxes by taking the IRA deduction, allowing them to then use the refund to actually make the contribution
  • Giving themselves a raise at work by properly adjusting their tax withholdings
  • Prioritizing their debt repayments
  • Amending their prior year tax return to take advantage of missed credits

And so on.

3. Ask you a LOT of questions, quickly.

Any halfway decent tax preparer can take the information you provide him, enter it into his software, and print out (or electronically file) your return. Many will even do so mistake-free. But what you really want–where the real opportunity is for a tax preparer to create value above his fee–is for the tax preparer to ask you questions. Some of them may even be somewhat personal.

You: What?

Look, he won’t be prying and he doesn’t need to know (and probably doesn’t want to know) the gory details. But only by asking you a bunch of very quick questions can he possibly ensure you pay the least amount of tax.

Here, we’ve developed the “speed round.” Every client receives a very simple excel workbook via email. Inside are about 50 very easy questions.

You: How easy?

Very easy. They’re all multiple choice and feature the following possible answers:

  • Yes
  • No
  • Not sure

These questions are like a visit to the new doctor, where you complete a form that has a million questions about your health history and (hopefully) you can select no for most of them.

You: Do you make your clients wear that paper gown?

People should wear whatever makes them comfortable but so far I am very pleased that we still have a gown-free client base.

# # #

What about you? Have you filed yet? Did you use a preparer or do it yourself? What worked well? What didn’t?

Bookmark and Share

Leave a Reply

You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>