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Choosing a tax accountant

Taking stock and resolving to do better in the future seems to be as much a part of the holiday season as gifts and celebrations. Sorting out your financial records for tax year 2000 is one way of doing this.

And, while you’re at it, why not set up a meeting with your tax accountant for early February? If you don’t have one, maybe this is the time to find one?

Here is a checklist to guide you in the search:

What are your needs?

The more complex your return, the more you need an accountant to help you. Look at your specific situation:

• Do you file a personal return that covers earned income, dividends and interest? Do you itemize deductions?
• Are you in a high tax bracket?
• Are you running a small business?

You or a bookkeeper will need to keep track of your finances from month to month, then provide your accountant with a detailed summary for the year -- keeping the receipts and other backup documentation on file.

Why choose a CPA?

There are tax preparers, accountants and Certified Public Accountants (CPAs) – in ascending order of education and experience, as well as professional fees. CPAs must pass a tough, two-day state licensing test. Afterwards, they maintain their accreditation by completing courses that keep them abreast of changes in tax laws, rules and regulations. They are held to the highest standard of professional ethics.

How much will it cost?

Most accountants charge by the hour or a fixed amount agreed upon in advance. Your accountant may present you with a letter of agreement that outlines exactly the amount of work, the time schedule, and any costs you may incur if additional services are needed. The size of the accounting firm and the rank of the accountant you’re working with also affect the price.

Finding the right accountant

Ask your friends, relatives and business associates, professional organizations, and even the local Chamber of Commerce for names. American Express also offers a list on the Tax and Business Services section of its Web site.

Then, make some calls and ask the following questions:

• How many clients do you have?
• Am I typical of your client base?
• Will you do my return or will someone else?
• Can you tell me about your education, including recent courses you have taken?
• Can you provide two references?

All other things being equal, your own judgment and instincts should determine your final choice. Since you will share your most confidential information with your accountant, you must feel a high degree of comfort and trust after meeting him or her.

To guide you through the entire experience, you may want to get a copy of the informative, up-to-date American Express Tax Guide.

December 14, 2000

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