2088: How to Find a Good Tax Preparer by Kelley Long of Financial Finesse on CPA, EA & Tax Planning

[00:00:00] [SPEAKER_00]: Now before we start, you might want to check out our other podcasts covering topics like personal development and minimalism, money, health, relationships and more.

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[00:00:15] [SPEAKER_01]: Now onto the show.

[00:00:18] [SPEAKER_01]: This is Optimal Relationships Daily Episode 288.

[00:00:22] [SPEAKER_01]: How to Find a Good Tax Preparing by Kelley Long of FinancialFinesse.com.

[00:00:27] [SPEAKER_01]: Hello, everybody. And thanks for tuning into another bonus episode here on ORED.

[00:00:33] [SPEAKER_01]: I'm Greg Audino and in this week's bonus content, you'll be hearing previously air-bentereal from Optimal Finance Daily right on time for Taxis.

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[00:00:53] [SPEAKER_01]: But with that, let's hear Diana provide narration and her commentary as we optimize your life.

[00:01:03] [SPEAKER_02]: How to Find a Good Tax Preparing by Kelley Long with FinancialFinesse.com.

[00:01:09] [SPEAKER_02]: As a CPA who used to actually prepare taxes for other people,

[00:01:14] [SPEAKER_02]: many are often surprised to learn that I no longer even prepare my own income taxes.

[00:01:19] [SPEAKER_02]: The first year my husband and I were married, I spent the better part of a spring Saturday,

[00:01:24] [SPEAKER_02]: imputing all of our stuff into the online software,

[00:01:27] [SPEAKER_02]: and resolved after that to outsource that task to a real pro-going forward.

[00:01:33] [SPEAKER_02]: When I was single and had just a W2 student loan interest and a deposit to my IRA,

[00:01:38] [SPEAKER_02]: my taxes were simple and it took me less than an hour to get them filed,

[00:01:42] [SPEAKER_02]: but our taxes are much more extensive these days.

[00:01:45] [SPEAKER_02]: My husband is an independent contractor, so he's considered self-employed.

[00:01:50] [SPEAKER_02]: We make several trips to Goodwill each year to drop stuff off,

[00:01:54] [SPEAKER_02]: which requires an entry for each and every trip.

[00:01:57] [SPEAKER_02]: And I have income from a moonlight gig as a fitness instructor

[00:02:00] [SPEAKER_02]: and writing the weekly savings tip for feed the pig.

[00:02:04] [SPEAKER_02]: Not to mention that my husband has a brokerage account where he likes to play the market a little bit,

[00:02:09] [SPEAKER_02]: with money we can afford to lose,

[00:02:10] [SPEAKER_02]: which some years means a dozen or more entries for capital gains and losses.

[00:02:16] [SPEAKER_02]: If time is money, then the money we pay are accountant to prepare

[00:02:19] [SPEAKER_02]: and file our taxes is money well spent.

[00:02:23] [SPEAKER_02]: If you're in the same boat, or find yourself in a new tax complexity

[00:02:26] [SPEAKER_02]: that isn't as easily handled by the tax software available to common folk,

[00:02:32] [SPEAKER_02]: here are some best practices for finding the best person to help you.

[00:02:36] [SPEAKER_02]: Decide if you want a tax prepare in EA or a CPA.

[00:02:42] [SPEAKER_02]: What's the difference?

[00:02:44] [SPEAKER_02]: I bet you didn't know that pretty much anyone can call themselves a tax prepare.

[00:02:48] [SPEAKER_02]: Although the IRS has started to regulate that by requiring people who accept payment for preparing taxes

[00:02:54] [SPEAKER_02]: to have a PTIN or a tax prepare or tax identification number.

[00:03:00] [SPEAKER_02]: An EA, an enrolled agent, is someone who has passed the IRS's test for tax preparation

[00:03:06] [SPEAKER_02]: and is allowed to represent taxpayers in front of the IRS.

[00:03:11] [SPEAKER_02]: Most EAs are going to be pretty well versed in the more common tax issues

[00:03:15] [SPEAKER_02]: like what you can deduct, self-employment income

[00:03:18] [SPEAKER_02]: and what credits you might qualify for.

[00:03:21] [SPEAKER_02]: A CPA or certified public accountant is someone who has a degree,

[00:03:26] [SPEAKER_02]: Dudie and Accounting and passed the Uniform CPA exam, which is no joke.

[00:03:31] [SPEAKER_02]: Just because someone is a CPA doesn't mean they do taxes

[00:03:34] [SPEAKER_02]: but if a tax person is a CPA, you can bet that they have a decent depth of knowledge.

[00:03:41] [SPEAKER_02]: If they are a CPA slash personal finance specialist like me,

[00:03:46] [SPEAKER_02]: then they have also passed an additional test demonstrating deep knowledge of personal finance issues

[00:03:51] [SPEAKER_02]: like retirement planning, budgeting and investing.

[00:03:55] [SPEAKER_02]: If your situation is pretty simple, but you just don't want to spend the time on preparation,

[00:03:59] [SPEAKER_02]: then you may be satisfied with a tax prepared through one of the large chains

[00:04:04] [SPEAKER_02]: like H&R block or Jackson Hue it.

[00:04:06] [SPEAKER_02]: Just know that since these companies guarantee accuracy and your lowest taxable income,

[00:04:12] [SPEAKER_02]: they're likely to go a little overboard in requiring you to document things that ultimately may not matter,

[00:04:18] [SPEAKER_02]: like casualty losses and medical expenses, which must exceed 10% of your adjusted gross income to count.

[00:04:25] [SPEAKER_02]: If you have a little more complexity, like self-employment income, income and multiple states or rental properties,

[00:04:32] [SPEAKER_02]: then you may want to look at either an EA or a CPA.

[00:04:36] [SPEAKER_02]: The biggest difference here is probably going to be cost although not always.

[00:04:41] [SPEAKER_02]: How to find an EA or CPA to help with your taxes?

[00:04:45] [SPEAKER_02]: For an EA, check out the National Association of Enrolled Agents.

[00:04:49] [SPEAKER_02]: For a CPA, look to your state's Society of CPAs by searching Illinois or whatever state you live in.

[00:04:57] [SPEAKER_02]: CPA Society.

[00:04:59] [SPEAKER_02]: That's the best way to find a database of those in your area since CPAs are registered through their state rather than nationally.

[00:05:07] [SPEAKER_02]: For CPA slash personal finance specialist, check out the website www.findasepa-ps.com.

[00:05:17] [SPEAKER_02]: When performing your search, make sure you limit results to specialties that apply to you.

[00:05:23] [SPEAKER_02]: If the database has a category for individuals, always check that and then also look for other complexities you may have such as multi-state or small business.

[00:05:32] [SPEAKER_02]: Your search is likely to turn out multiple results, so you'll want to filter out anyone who works for a large firm because they're less likely to actually work with everyday people.

[00:05:43] [SPEAKER_02]: And instead specialize in very wealthy individuals.

[00:05:45] [SPEAKER_02]: I tend to look for people who work in a small office or even on their own.

[00:05:51] [SPEAKER_02]: They're more likely to want to work with everyday people at an affordable rate.

[00:05:55] [SPEAKER_02]: After that, it may come down to convenience.

[00:05:57] [SPEAKER_02]: Whose office is easiest for you to get to in order to drop information off signed documents or stopped by mid-year for a tax planning session?

[00:06:05] [SPEAKER_02]: This brings me to another criteria.

[00:06:08] [SPEAKER_02]: Do you want someone to just prepare and file your taxes or do you want someone to help you save money on taxes going forward?

[00:06:14] [SPEAKER_02]: Our accountant is a straight-up tax prepare, at least for us.

[00:06:18] [SPEAKER_02]: If you're looking for more guidance on saving money going forward, then you'll want to ask a potential prepare if they do tax planning.

[00:06:26] [SPEAKER_02]: And you may want to look for the CPA slash personal finance specialist credential or PFS.

[00:06:33] [SPEAKER_02]: The sad fact is that there aren't a lot of CPAs out there who actually want to do income taxes for regular families who just have jobs, kids, a house and a few charitable donations.

[00:06:44] [SPEAKER_02]: The easiest way to find one that does is to just pick up the phone and start asking, do you accept individual tax clients and what is your minimum fee?

[00:06:53] [SPEAKER_02]: If the minimum is more than $500, I'd say move on.

[00:07:01] [SPEAKER_02]: You just listen to the post titled How to Find a Good Tax Prepare by Kelly Long with FinancialFinesse.com.

[00:07:09] [SPEAKER_02]: This is a really relevant article to me personally because I'm actually talking to my CPA tomorrow.

[00:07:14] [SPEAKER_02]: And now I want to ask him if he's also a personal finance specialist.

[00:07:19] [SPEAKER_02]: Once I formed my LLC in 2019 for the Economy Conference, I started working with a tax professional and have found it to be well worth the cost.

[00:07:28] [SPEAKER_02]: My CPA gets me a much larger return than I have ever gotten on my own.

[00:07:33] [SPEAKER_02]: Now that I'm also self-employed, it's even more important that I work with someone that's making sure I'm claiming all the deductions I can.

[00:07:40] [SPEAKER_02]: I used to like to do my taxes myself, but back then I was just taking the standard deduction and my situation from a tax perspective was really simple.

[00:07:51] [SPEAKER_02]: I also agree with the sentiment to find an independent CPA or a small firm.

[00:07:56] [SPEAKER_02]: The first person I worked with was at a large firm and they charged me $700 for a very simple filing I needed for my LLC.

[00:08:05] [SPEAKER_02]: I also didn't trust this person's knowledge base due to a number of inconsistencies in his advice.

[00:08:12] [SPEAKER_02]: I had my back against the wall with a deadline, so I begrudgingly paid the $700 for this one filing.

[00:08:20] [SPEAKER_02]: But I'm so happy I then took the time to find an independent CPA.

[00:08:24] [SPEAKER_02]: I'm now getting much better service at a much lower cost.

[00:08:27] [SPEAKER_02]: Just wanted to point out that this website for finding a CPA who is also a personal finance specialist or PFS referenced in this article seems to be an old link.

[00:08:40] [SPEAKER_02]: I googled it, I tried different variations such as find a CPAps.org which was referenced on other websites but I came up short.

[00:08:50] [SPEAKER_02]: So if you're a better researcher than me and you find this site to share, please send it into finance at oeldpodcast.com

[00:08:58] [SPEAKER_02]: and will include it in a future newsletter. And by the way, if you're not on our mailing list, you can sign up at oeldpodcast.com

[00:09:06] [SPEAKER_02]: And that's another addition of optimal finance daily in the books have a great rest of your weekend if you're listening in real time

[00:09:13] [SPEAKER_02]: and I'll be back tomorrow where you're optimal life awaits.