Green Eyeshade Special: why you need a CPA for your taxes

If you have anything more than a W-2,home mortgage interest and the related property taxes, or CASH charitable contrutions or you lived in more than one state, it probably makes sense to hire a Certified Public Accountant (“CPA”) for your taxes. Yes, you can file free using a lot of services, but please, unless you are up on things tax wise, have a professional look at the returns.

No matter what you hear, a good experienced CPA can probably do your return cheaper than H & R Block or Jackson Hewitt or that outfit with the people in Statue of Liberty suits outside them.

Yes, I know this seems counter-intuitive, but I have seen it countless times over the years. Too many to remember. And this has nothing to do with the correctness of the return. The typical CPA will catch things others just will not.  This is just  because of experience.

But make sure you use a CPA that does taxes.  Contrary to popular opinion, not all do them, and while all can theoretically practice in front of the IRS, hire only those that do.  I am a CPA and have no business in front of an IRS auditor.

 Let’s put it this way: I am a CPA and I pay another CPA to do MY taxes.

If you get a notice of an audit, do not answer it yourself. Use an intermediary, like a CPA or tax attorney. Anything you say to the IRS is hard to unsay and you want someone who knows what they are doing representing you.

File your return even if you owe money that you do not have. You do not want a “failure to file” penalty on top of everything else.  File it and ask for a payment plan.  These are fairly easy to get these days, but once you have one, stick to it.  They do not like broken promises any more than do finacee’s.

And if you owe a whole bunch, do not fall for those appealing advertisements about settling for 15% of what you owe. CPA’s do not advertise like that or much at all, and when they do, it is tightly controlled and regulated . Ask yourself how much of their revenue is spent on advertising?In the old days, the “offer-in-compromise” (the settlement for pennies on the dollars) was an art form. Now it is rather formulaic and fact-based driven and while there is not just a lot of room for negotiation, use a CPA or a tax attorney.

How do you find a CPA? Ask your friends.  Look in the yellow pages.  Call your State Society of CPA’s, most of which do referral services. Interview several and find one you are comfortable disclosing everything to (and that is another thing: do not lie to them.  They cannot help you without the truth).

And please, please, please, do not wait until the last day to give her your information.

2 thoughts on “Green Eyeshade Special: why you need a CPA for your taxes

  1. I just give people your number directly. “You haven’t filed in the last decade, you say? You’re on your second marriage THIS YEAR? Oh, and you own a cash only ice cream stand alongside your day job of running a restaurant? Here’s his card, he’ll be thrilled to assist you with all of your tax needs.” Keep your telephone on TAX MAN!! Hahahahahahaha.

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