Do you have big questions about your finances?
Are you unclear about how certain financial decisions (buying a home, getting married, starting a business) will affect your taxes?
Would you like to confirm that you’ve taken advantage of all the money-saving tax strategies (opening a SEP IRA, stashing a bunch of art on a yacht) that are appropriate in your current financial situation?
It might be time to hire a CPA.
I have had multiple CPAs; my first CPA was a bad fit (he did not understand what “freelance writing for the internet” was), so I swapped for a new CPA who was very helpful and whom I would have stuck with forever had I not moved from Seattle to Cedar Rapids.
After the move, I interviewed three different CPA firms before I found a CPA who felt like a good match. CPAs are kind of like therapists, in that they can help you solve problems but they can also try to shove you into solutions that you’re not comfortable with. (One of the CPAs I did not work with wanted me to save tax dollars by running my freelance business as a S-Corp and pay the penalty if “the IRS noticed.”)
I also made the mistake, near the end of last year, of thinking I didn’t need to work with a CPA to prep my 2018 taxes. I told my CPA that I was going to do my taxes on my own, because I had read how to do it on the internet and already filled out a sample 1040, and literally one week later said “wait I made a HUGE MISTAKE, can we still work together?” (The fact that my CPA said “of course” without making me feel like a fool was another reason I knew I’d found the right person to work with.)
I know that Billfolders have asked, in the past, when it is time to get a CPA. I’d say any time you find yourself on the internet when you’re supposed to be going to sleep, googling things like “single-member LLC profit vs. distribution” or “mortgage deduction tax law changes,” is a good time to consider working with a CPA. Likewise, any time you are about to experience a big life change such as homeownership, small business ownership, birth, inheritance/estate settlement, marriage, divorce… get yourself a CPA. (Also, maybe a lawyer. Your CPA will let you know if that’s a good idea.)
CPAs can also help you decide which retirement investment vehicles are the best options (traditional IRA or Roth?) and can even help you develop strategies for paying down debt or increasing your credit score.
Yes, CPAs cost money and yes, a lot of this information is available online — but it’s kind of like trying to cut your bangs yourself vs. going to a professional. Sometimes paying money to solve a problem is the best choice.
Also, calling a CPA firm to ask how a CPA can help you is free. In most cases, your initial conversation with the CPA is also free. The financial commitment only comes when you and the CPA agree to work together and solve your financial problem or address your big financial question. (Often, the CPA firm will also request that you let them do your taxes.)
So… get a CPA, if you’re thinking about getting one. If you’re not sure you want to fully commit to a CPA, set up introductory phone calls with at least two different firms to get a feel for what working with a CPA might be like.
And do it, like, this week, before all the firms get swamped with tax prep.