Congratulations that your tax dilemma is the result of good fortune. I am not a tax professional, but also recently had different one-time financial events beyond my familiarity necessitating consultation. This was my experience.
I found several types of tax consultants:
A. Those who are certified by the state (in California “Registered Tax Preparers) or IRS (Enrolled Agents - EAs) to prepare tax returns.
B. Those who are licensed by the state to practice accounting (Certified Public Accountants - CPAs) – some of whom practice tax return preparation among broader training in other skills.
C. Those who are licensed by the state as attorneys who specialize in tax law, tax legal proceedings, and less often, preparing tax returns (Tax Attorneys.)
D. Other tax preparers not necessarily certified or licensed by a recognized authority – less likely to be compatible with your “complex” situation.
For my 2023 federal and state tax returns, quoted fees from EAs and CPAs ran from sub $200/hr to the high $300s/hr – or less often a menu of ala carte charges for each individual tax form. EAs tended to be less expensive, but not always. I was billed both for in person and phone discussions, my consultant’s time to research forms and situations unfamiliar to them, their time to enter my tax data into their tax return preparation software, and editing the draft return for my questions / corrections and any elections they identified that I could choose from. I used an EA who charged me $170 - $200/hr depending upon the topic, and for 105 pages comprising about 30 federal and state forms, a total of about $2400. Mind you, he took a liking to me, discounted some fees, and having done my own tax returns for the previous 40 years many as a business owner, I did most of the bookkeeping and ledger preparation myself – so the total was probably on the low side. On the other hand, I asked a lot of questions, and wanted to understand the forms that were new to me so I could do my own future tax planning if similar situations arose, and this increased my cost a bit.
I searched my local area on the internet for EAs and CPAs, looked at the officers of the local EA and CPA professional societies, and solicited my professional colleagues for their recommendations (some consultants were not taking new clients unless referred from an existing client). From that list, I deleted anyone who did not have a website. I prioritized those whose website indicated they had a portal to facilitate secure transmission of documents, had a webpage to submit inquiries (and uploaded a one paragraph description of my situation and a list of anticipated forms required), who took the time to responded to my web inquiry or phone call as to whether their practice encompassed my situation, who could provide an understandable explanation of their fees, and whose websites where not clones of some standard template and offered some useful consumer education. From those, I accepted a “free” half-hour consultation from two who seemed most familiar with my situation, at which time I presented a one page summary of my tax transactions, estimated tax return, and granted their interest in my prior year return. One was the senior partner of several EAs and wasn’t interested in “teaching me how to do tax returns” – but graciously referred me to a colleague whom I also interviewed by phone but did not use. The other was a soloist who was amenable to answering questions and exploring options at my hourly expense, admitted he would have to research some issues also at my expense, was open to me wanting to understand those issues that were new to me so I could learn to incorporate them into my future tax planning, who explained that he would inform me when tax savings for a line item would be a waste due to the greater cost of preparing another form, and that he would guide me as to what could be claimed with what he felt was acceptably low risks. I went with the soloist.
Hope that helps.
I found several types of tax consultants:
A. Those who are certified by the state (in California “Registered Tax Preparers) or IRS (Enrolled Agents - EAs) to prepare tax returns.
B. Those who are licensed by the state to practice accounting (Certified Public Accountants - CPAs) – some of whom practice tax return preparation among broader training in other skills.
C. Those who are licensed by the state as attorneys who specialize in tax law, tax legal proceedings, and less often, preparing tax returns (Tax Attorneys.)
D. Other tax preparers not necessarily certified or licensed by a recognized authority – less likely to be compatible with your “complex” situation.
For my 2023 federal and state tax returns, quoted fees from EAs and CPAs ran from sub $200/hr to the high $300s/hr – or less often a menu of ala carte charges for each individual tax form. EAs tended to be less expensive, but not always. I was billed both for in person and phone discussions, my consultant’s time to research forms and situations unfamiliar to them, their time to enter my tax data into their tax return preparation software, and editing the draft return for my questions / corrections and any elections they identified that I could choose from. I used an EA who charged me $170 - $200/hr depending upon the topic, and for 105 pages comprising about 30 federal and state forms, a total of about $2400. Mind you, he took a liking to me, discounted some fees, and having done my own tax returns for the previous 40 years many as a business owner, I did most of the bookkeeping and ledger preparation myself – so the total was probably on the low side. On the other hand, I asked a lot of questions, and wanted to understand the forms that were new to me so I could do my own future tax planning if similar situations arose, and this increased my cost a bit.
I searched my local area on the internet for EAs and CPAs, looked at the officers of the local EA and CPA professional societies, and solicited my professional colleagues for their recommendations (some consultants were not taking new clients unless referred from an existing client). From that list, I deleted anyone who did not have a website. I prioritized those whose website indicated they had a portal to facilitate secure transmission of documents, had a webpage to submit inquiries (and uploaded a one paragraph description of my situation and a list of anticipated forms required), who took the time to responded to my web inquiry or phone call as to whether their practice encompassed my situation, who could provide an understandable explanation of their fees, and whose websites where not clones of some standard template and offered some useful consumer education. From those, I accepted a “free” half-hour consultation from two who seemed most familiar with my situation, at which time I presented a one page summary of my tax transactions, estimated tax return, and granted their interest in my prior year return. One was the senior partner of several EAs and wasn’t interested in “teaching me how to do tax returns” – but graciously referred me to a colleague whom I also interviewed by phone but did not use. The other was a soloist who was amenable to answering questions and exploring options at my hourly expense, admitted he would have to research some issues also at my expense, was open to me wanting to understand those issues that were new to me so I could learn to incorporate them into my future tax planning, who explained that he would inform me when tax savings for a line item would be a waste due to the greater cost of preparing another form, and that he would guide me as to what could be claimed with what he felt was acceptably low risks. I went with the soloist.
Hope that helps.
Statistics: Posted by ThriftyInvestor — Fri Nov 01, 2024 1:34 am — Replies 1 — Views 289
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