As your career develops, your investments become more diverse, and your tax needs grow more complex, you may be asking yourself: do I need a tax accountant, or can I handle my taxes myself?
You may want to consider hiring a qualified tax professional if any of the following are true:
- You earn more than $200,000 a year.
- You run your own practice or other business, invest in the stock market, own rental property, live outside the United States but still file taxes in the U.S., or any of these other situations.
- You are paying back taxes, paying off taxes or facing an audit.
Add to that the reality that tax code may soon change, and the need for expert advice becomes even more apparent.
A tax accountant can help you understand and plan your taxes not just during tax season, but all year round. Unlike tax preparation software or a Google search, a qualified tax accountant can sit down with you for a face to face consultation focused on your specialized needs. Over time, you can develop a relationship with your tax accountant that will help him or her understand and anticipate your needs.
If you've made the decision to add a tax accountant to your team, hone in on just the right one by asking fellow doctors for referrals. Who do they use? Do they recommend them?
Once you've identified a candidate, don't be shy about interviewing them. Some questions you'll want to ask:
- What is your educational background and experience? What licenses or designations do you have? Be sure to verify that the tax accountant has Preparer Tax Identification Number (PTIN) with the IRS.
- What tax issues do you specialize in? Are you familiar with special tax needs and opportunities for doctors?
- Do you believe I'm paying too much, too little, or just the right amount of tax?
- What are your fees?
- Do you outsource any of your work? Do you perform the work personally? If not, what is the review process? Who signs tax returns?
If you are satisfied with the responses to the questions, ask yourself an important question: do you trust this person? Are you prepared to learn from them, and receive their advice? You're going to be sharing details about your life with your tax accountant, and trusting them to help you make significant decisions that will likely have profound impacts upon your life and the lives of those you love. Make sure you are confident in them.
Once you've settled on a tax accountant, be sure you schedule an annual review with them no later than October of each year. That timing should help you get a good handle on your situation, and help you prepare to file taxes in Q1 of the following year.
It's not too soon to start thinking about 2018!