Is Your Accountant Cutting The Mustard?

We tend to view our accountants like we do doctors – we trust them without question. This is a good choice in some cases, but a bad one in others. In this article, we take a look at the question of whether your account is cutting the mustard when it comes to minimizing what you pay in taxes.



There is admittedly going to be a bit of accountant bashing in this article. That being said, you need to also look in the mirror and consider the rather large amount of personal responsibility you have when it comes to what you pay. An accountant is not all knowing. If you give them poor information or don’t make the necessary effort, you are going to get corresponding poor results.



Is you accountant cutting the mustard? Well, let’s consider what the mustard should be. The mustard is the amount of tax you pay. You should retain an accountant for advice and tax strategies. If you are lazy, you can use them for filling out tax returns as well, but you need to understand the tax software offered on the market today is pretty proficient doing this. This gets us to the fundamental question of whether you have a proactive or reactive accountant.



A proactive accountant is one who is looking out for your well being. This is a professional that sets up two meetings each year with you. One is at the very beginning of the year to review how you expect things to go, any anticipated developments [kids, more money, less money] and create a plan for it. The second meeting is at the end of the year when you sit down and figure out what tweaks need to be made to the plan given what actually happened during the year. This is a good accountant, the type that you want.



A reactive accountant is someone who sends you a letter of questions to answer so they can fill out your tax return for the year. There is no discuss of tax strategies or adjustments that can be made to slash your tax bill. One has to wonder what exactly you are paying for? The CPA will charge you hundreds of dollars to prepare the return or you could just buy software for less than a hundred to do it yourself. Regardless, this is a reactive CPA and should be avoided since the only "benefit" you get is more expensive tax return preparation.



Is your accountant cutting the mustard? If they are proactive, they are. If they are reactive, it is time to look for a new sandwich maker!



Richard A. Chapo writes about income taxes for BusinessTaxRecovery.com where you can get help with a payroll tax problem.