If you are now thinking about selling options in the public market or exercising a significant number of options for the first time, we strongly suggest the services being retained by a reputable tax accountant. We certainly understand that a fee will be incurred, but you must understand the potential risks involved and possible unforeseen taxes that might be incurred if you opt not to take on the services of a great tax accountant. You cannot as easily figure the potential savings involved from gaining the services of a tax accountant compared with those gained by an estate planner, but the truth is they are certainly just as necessary. And you are probably, as most people are, unsure of just how to best select a tax accountant.
Well, take a look now at the top 11 questions which we suggest that you ask courtesy of Ribeyre Chang Haylock Accountants. Before making a decision and be aware that these are not necessarily in priority order:
- What licenses do they have?
- How many years do they have individual tax experience?
- In areas that are relevant to you, do they have experience?
- If you are audited, will they represent you?
- Do they have an advanced degree?
- What fees will they charge?
- At no charge, will they review your past tax returns?
- To keep fees down, is there anything that I can do?
- Who will actually work on your return?
- Does the adviser need to be local?
- With your prospective accountant, are you comfortable?
In Areas Relevant To You, Do They Have Expertise?
If it is a technology company that you work for and they issue RSUs or stock options, you want to make certain that other clients in the same situation have been handled by your accountant. Even better, try to make certain that they have also worked with those individuals in a more senior position than you occupy because there will usually be even more complexity that comes with that seniority. A true professional will gladly tell you if they aren’t right for the job either because it is too complex due to their lack of relative experience, or that it is too simple a deal to warrant their help in it.
How Many Years Do They Have Of Individual Tax Experience?
Doing individual tax returns, a minimum of five years experience is what an appropriate tax adviser should have. And as opposed to a small firm, experience gained in a larger firm usually will have exposed them to a broader range of issues and topics, making that experience even better!
Just What Licenses Do They Have?
Although it is not technically required, it would truly be preferable if your accountant possessed a CPA(Certified Public Accountant License). Tax attorneys should possess an advanced tax degree or an LL.M in Tax.
Is Their Degree An Advanced Degree?
You should be aware that even with no specialized training in tax, a CPA can do tax work. This makes it often much more valuable to seek that individual with advanced training such as one with a tax specialty within an MBA. It is true that if advanced classes have been taken by your accountant as a part of their Continuing Professional Education requirement, an advanced degree is not necessary. But you should be aware that the more courses the tax adviser/preparer has taken, the better it is for you!
If You Are Audited, Will They Represent You?
In the unlikely case that you are audited, a professional tax preparer should be willing to stand by the return they prepared(for an additional fee). If they are reluctant on this issue to do so, that is a big red flag!
At No Charge, Will They Review Your Past Tax Returns?
The truth of the matter is that it will rarely take more than fifteen minutes or so of their time going over your prior returns, to see if they will be comfortable handling them. And so that they can be more productive when you actually first meet, a capable professional should ask you to send prior returns in advance for them to go over and get somewhat familiar with.
What Fees Will They Charge?
I believe that charging by the hour is the only fair way for a tax adviser to charge their client. Of course, you should be aware that very often where you are located will be a determining factor in final costs, as well as whether you are dealing with a large firm or a smaller one. Obviously, someone in New York City, San Francisco or Chicago, is usually going to be paying higher rates than that individual in a small community elsewhere. Also, that senior partner in a large firm will be charging quite a bit more per hour than that junior partner in the smaller firm. These are all facts of life, and you have to adjust your expectations to the understanding of the situation in which you are placed!
To Keep The Fees Down, What Can The Client Do?
One important thing to keep in mind is that the better organized and prepared that you are, the less time that will be needed for the accountant to be searching for things. Less time needed to them translates into less money needed to be paid by you. Do whatever you can to organize your information and carefully arrange it to be presented to your accountant so that they don’t have to waste a lot of time going through these things.
With Your Prospective Accountant, Are You Comfortable?
Always keep in mind how important it is that you feel comfortable with your accountant, as there is a good probability you are going to be dealing with some tough tax decisions ahead. And you want to be sure that the person you select is someone who is open and responsive to any and all questions that you may have.
Who Will Work On Your Returns?
You want to know precisely who it is that you will deal with at the firm you choose, should there be many accountants on staff. And you want to be certain in advance that you can and will have direct contact with that individual and not have to deal through any intermediaries.
Does Your Adviser Need To Be Local?
The truth of the matter in this area is that the final decision is entirely up to you. If you need to see someone often face to face, that is fine. But if you are comfortable with the phone or computer doing things, that works also. The final decision is yours!
We hope that going over these 11 questions and reading the attached material is going to be of help to you in making your decisions regarding your certified professional accountants and your accounting needs moving ahead! Also, big shout out to Ribeyre Chang Haylock below for this excellent editorial.
Ribeyre Chang Haylock – ribeyre.ca/
2071 Kingsway Ave, Port Coquitlam, BC V3C 6N2