Well, as Albert Einstein said ‘The hardest thing in the world to understand is income tax’. Consider these statistics:

• The IRS produces 649 separate forms, schedules and instructions.
  
  
• There are apx. 700 separate sections of the tax code that apply to individuals. Over 1,500 that apply to businesses.
  
  
• According to the IRS it takes the average person 13 hours to complete a 1040 tax form.
  
  
• Americans will spend an estimated 5.8 billion hours complying with the tax code.

That being said the answer is No, everyone does not need an accountant to prepare thier tax returns. If you don’t own a home, don’t have investments and don’t own a business, then you probably don’t need an accountant to prepare your tax returns. Their are many software programs on the market right now that can assist you.

However, if you have assets, investments, a business etc… it is a good idea to have an accountant prepare your tax return, since the laws and options you have can be confusing. If you are in this position, ideally, you want a relationship with an accountant that goes beyond, just preparing your tax returns to include someone who can act as a financial adviser to your business on such issues as if you should become a C corp. or S corp., keeping you up to date on sales and payroll tax regulations etc…

So, assuming you want to work with an account how do you find the right one? There are four things you want to do to find and hire the right accountant.

1. Ask friends and business associates for recommendations. Keep in mind, the accountant does not need to live in your area or be licensed in your particular state. Email, fax, phone and overnight services make it easy and practical for you to use an accountant who lives anywhere in the country.
   
   
2. Check to see that the firm or individual is a Certified Public Accountant (CPA). These are people who are licensed by a state board of accountancy and required among other things to take a certain amount of continuing education units each year. This helps insure that they are up to date on important items such as changing tax laws and the shifting sands of what is deductible and what is not. You can go to the American Institute of Certified Public Accountants (www.aicpa.org) to verify certification of an individual or to locate a CPA within your area.
   
   
3. Evaluate the accountant’s area of expertise against your specific needs. In the case of accountant’s one size does not fit all. Find out if this accountant specializes in the kind of work that you will require. For example, there are CPA’s who specialize in small businesses, while others may have a specialty such as medical practices or start up companies etc… Understanding the other kinds of clients your CPA has, will help you to determine if this person is the right one for you or not.
   
   
4. Determine who will do the actual work on your account. In many larger firms, the CPA is the owner and head of business, but other people do the day-to-day work. If you will be working with someone other than the CPA, you want to meet or talk to that person to make sure you feel comfortable with his or her qualifications and working style. Likewise, find out if the CPA reviews all tax returns and other documents prepared by their staff.

Once you have hired an accountant, what can you expect and what should you do to establish a good working relationship with them?

First of all it is critical that you have a good working relationship with your accountant. You don’t want an antagonistic relationship. What you have a right to expect from the accountant you hire is:

• Honest opinions
  
  
• Accurate facts
  
  
• Prompt response

Your part of the equation is to be an informed client. Many people make the mistake of putting all the responsibility in the hands of the accountant and not understanding the details or implications of what the accountant is advising. Your accountant is your advisor, not the person to tell you how to run your business.

A few other items to keep in mind:

• You want to make sure that you are not paying CPA rates for basic bookkeeping tasks.
  
  
• If the work is limited in scope get a letter of engagement detailing work to be performed, who will perform it and the estimated costs.

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