Having the right team of advisors is critical to achieving your financial goals faster than you ever thought possible. For most people, taxes are the single biggest expense. This makes finding the right tax preparer for your team extremely important.
HOW DO YOU FIND A TAX PREPARER THAT IS RIGHT FOR YOU?
First, not all tax preparers are the same. I previously wrote an article about this last year titled: “Tax Returns – Are they really all created equal”, and you may be as surprised as other readers about just how much tax return preparation can vary.
In fact, I calculated the average savings I typically find from annual tax savings, reducing professional fees and audit assessments. In total, the average savings are:
– $23,750 Annual tax savings
– $5,000 Audit defense savings
– $10,000 Reduced audit assessment savings
– $50,000 Reduced legal fees
– $3,000 Reduced tax return preparation fees
This is a total average potential savings of $91,750! Your tax preparer does make a difference! How much more could you do with these savings?
Second, the right tax preparer for you depends on what is important to you. Take a minute to answer this question:
WHAT MAKES YOUR TAX RETURN SUCCESSFUL?
How you answer this question will impact what type of tax preparer you need on your team. I’ve asked this questions to clients, prospects and colleagues. I have compiled the most popular answers and what it means to you as you find the tax preparer for your team.
ANSWER #1: Paying the least amount of tax legally
Your tax preparer needs to:
– Know the tax law very well and know how to be creative legally.
– Ask you a lot of questions about your situation in order to understand your situation and goals.
– Have a review process where at least one other person reviews your return solely for the purpose of how to reduce your taxes legally.
HERE ARE SEVEN (7) QUESTIONS YOU SHOULD ASK YOUR TAX PREPARER TO DETERMINE IF IT’S A GOOD FIT:
Q1: Can you tell me about the other ___________ (your industry) you service?
A: Your tax preparer needs to know how the tax law applies to your situation. Having other clients in your industry or with similar investments indicates that the tax preparer is likely to be familiar with the tax laws that impact you.
Q2: Who will be working on my tax return?
A: It’s very common (and a good business practice) for tax preparers to have staff prepare your tax return. You want to make sure the other people working on your return have the same level of expertise.
Q3: What is your tax return review process?
A: Tax preparers who are focused on reducing your taxes will have this built into their review process. Usually it involves having another experienced tax preparer review the return solely for the purpose of finding ways to reduce your taxes.
Q4: What would you have done differently on my past tax return?
A: Show the tax preparer you are interviewing your prior year tax return. Creative tax preparers will be able to give you at least one idea of what you can do to reduce your taxes by looking at your tax return for just a few minutes. If it’s creativity you are after, this is a great question to ask! But don’t expect the tax preparer to give you all the details right then and there – that’s why you pay them!
Q5: How much can you save me in taxes?
A: While it’s difficult for any tax preparer to answer this in just a few minutes of looking at your past tax return, it is possible for them to know if they can save you taxes after spending 30 minutes with you.
Q6: What deadlines do you impose on clients?
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