Why Do I Need a Tax Accountant?
Accountants have a wide range of skill sets, talents and training, but none of them know everything. You wouldn’t hire a plumber to mow your lawn. You wouldn’t hire a criminal defense lawyer to help in a lawsuit. Accountants are the same. Working with a tax accountant at tax time will help you get your taxes professionally prepared and filed.
The vast majority of Canadians don’t need a tax specialist. In short, they are for complex situations only. Tax specialists can help with very advanced corporate structuring, international tax issues and family trusts. They are justifiably far more expensive than a typical tax accountant. They have had a lot of training and experience and usually work with tax lawyers regularly.
Tax accountants have had specialized training in the preparation and filing of tax returns. They constantly stay up to date with the latest tax legislation. They primarily do tax returns and don’t do much else as a part of their business.
Chartered Professional Accountants
Working with a Registered Chartered Professional Accountant (CPA) Firm will provide you with the highest level of comfort that you’re working with a professional. You’ll want to make sure they are in good standing with the CPA organization. To see if your tax professional is in good standing in Ontario and is operating a registered firm, search them on the CPA Directory.
Registered CPA Firm Tax Accountants
CPA firms operating above-board operate as registered firms. CPA Ontario requires that all CPA’s who serve the public register their firm, even if it’s just a single person working there. These firms must carry appropriate insurance. The CPAs working there must be in good standing with CPA Ontario. They must get regular updates about changes to the tax code. Most importantly, they are accountable and responsible. If they make mistakes, the taxpayer has recourse – both with CPA Ontario and the legal system.
Best Fit For Your Tax Accountant
Select an accounting firm that you feel comfortable working with. Being able to prepare taxes and file them on time is a basic requirement. You should work with a firm whose values align with yours. Most importantly, you need an accountant who will explain things to you. It’s your money, it’s your responsibility and you deserve to understand the situation.
Communication From Your Tax Accountant
Some accounting firms communicate in “Accountanese”, using jargon and terms nobody outside accounting understands. This is not helpful. Make sure that your accountant takes the time to answer your questions and explain your situation to you.
Advice From a Tax Accountant
A good tax accountant is always looking for ways for you to pay less tax. They also tell you about upcoming tax incentives so you can see if you qualify. Most importantly, they are looking at your information and thinking about it, not just doing data entry.
Tax Accountant Relationships, Not Transactions
You deserve a relationship with your tax accountant. If something goes wrong, you need a professional by your side. When you’re planning something, it’s helpful to ask your tax accountant questions about things to be aware of what you can do. You need someone you can reach out to when you have questions.
Red Flags When Choosing an Accountant
The following are some red flags that you should be aware of:
- The tax preparer does not charge a fee, they simply keep a portion of your refund. This can be a problem for several reasons:
- Not everyone is entitled to a tax refund
- There is an incentive to increase the refund so the accountant gets paid more
- Sometimes, they just make things up
- The tax preparation fee is really cheap. This can mean:
- Their firm is unregistered
- They aren’t really a CPA
- They’re operating a cash business and engaged in tax evasion
- They send work out to inexperienced (such as high school students) and low-paid staff (such as offshoring your tax information overseas)
- The tax preparer promises results before seeing your information. Always be aware of professionals who promise results. Results can almost never be guaranteed.
- They provide advice about how to cheat on your taxes. You sign the return, it’s your responsibility and you will be the one who needs a lawyer if you get caught.
When you’re considering a tax accountant, think about the following things:
- Are you getting the right level of service?
- What is their standing with CPA Ontario?
- Are they operating above-board and ethically?
- Are they running a registered firm?
- Will they explain things in terms you understand?
- Will they provide advice or just do data entry?
- Can you have a relationship with this accountant?