Do a quick search in the phone book and you’ll find countless tax preparers all claiming the offer the best service and lowest prices around. So which should you choose? To find out that, we spoke with Alex Zorab. A well-respected CPA and partner at First American Tax Services, he has been working with both personal and business clients for a number of years.
In the majority of cases, a person’s best bet in finding a good accountant that he can trust is to go by word of mouth. That is the number one way to find someone who can do your taxes, because friends and coworkers typically have some type of advice on which accountants they have worked with before and how they felt about their experience.
If you are someone who knows that your personal tax situation is not simple, then you might need to do a little bit more investigating to find a tax preparer who has the knowledge and experience necessary to handle your situation.
To give you a frame of reference, a simple tax situation would be one in which the head of household who is filing taxes has a spouse, one or two kids, and gets only one or two W2 forms each year. Maybe this person owns his own house and has one or two loans, but that’s it. Someone in a tax situation like that would qualify as someone with a simple, straightforward case.
When you start looking at individuals whose cases are more complex than that, things can become a bit more tricky. I personally would never advise someone to try and handle his own taxes. But especially in cases like this, where someone is an independent contractor or has outside sources of income and things like that, I certainly would not advise him to try filing income taxes on his own.
The problem is that every year the IRS comes up with new credits and deductions, and they get rid of some of the credits and deductions that were available in year’s past. Something like the energy saver credit, for example, which is a critical point for homeowners paying taxes this year could easily be overlooked by a novice trying to prepare taxes himself.
Even for people who mistakenly think they are pros at filing their own taxes, because maybe they have been doing it for years, filing this year could be a big mistake. The tax code is changing rapidly right now, and many of the deductions that were accepted last year may not be accepted anymore. So if this person went about filing just has he had in year’s past, then he could be in a world of hurt if the IRS stepped in and took a closer look at what he was doing.
Just as one example: In 2010, the IRS is letting homeowners deduct money for buying a new furnace. But in 2009, that would not have been the case and the IRS would not have accepted it. In 2010, the IRS would let you deduct the cost of putting in new insulation in your home, but in 2009, they would not have accepted it. New doors and windows are along the same lines — accepted in 2010, but not in 2009.
When you go about finding a tax professional, it is important that you choose someone you feel like you can talk to and that you trust. Having someone who seems competent and appears to know what he is talking about is a big deal in this industry, because this could potentially be the person who is standing by your side in the unfortunate event of an IRS audit.
I highly recommend that people look into hiring a qualified CPA, and a CPA who does taxes specifically. And before I handed over any of my information, I would always look at this CPA’s website to see if he seems knowledgeable about current tax laws or not. That is something also that I would factor into my decision of who to hire. Otherwise, by hiring someone with little knowledge or experience, you could be putting yourself in a situation where you could potentially be opening yourself up for an audit from the IRS.
