The truth is that it is easy to feel overwhelmed when it comes to dealing with your personal financial life, especially when you have to wrestle with taxes, investments, budgets and future planning. Utilising the services of professional accountants can remove this concern and give you the highest quality advice and help you when you need it most. In the following blog, discover how to find an accountant for personal use, so you can be confident in the way you manage your finances.
When You Might Need a Personal Accountant
Before you can begin your quest, make sure you understand what you can use a personal accountant for. They can assist with:
- Tax Preparation and Filing: Record keeping for taxes and paying taxes at the end of year.
- Financial Planning: Helping to establish and achieve financial goals, such as saving for retirement or purchasing a home.
- Investment Advice: Assistance on building and updating your investment portfolio.
- Budget: Helping develop and stick to a budget to control spending.
- Estate Planning: Counseling on methods of arranging for the administration and disposition of property in the manner you desire.
If one or more of these areas describes your financial life you may want to consider hiring a personal accountant.
How to Find the Perfect Personal Accountant
1. Assess Your Financial Needs
In the process of how to find an accountant for personal needs, the first step is to take stock of your finances and find out what you need. Do you want assistance with tax preparation, financial planning, or certain types of investment advice? It will benefit you to know what you need, by which you can describe the type of accountant who is expert at the services you need. For instance, If you have complicated tax issues or investments, you may wish to find a CPA (Certified Public Accountant) or an Enrolled Agent (EA).
2. Seek Recommendations
Once you’ve identified your financial needs, the next step in how to find an accountant for personal finances is to ask for recommendations. Ask your family members, friends or co-workers who might have employed personal accountants. Their past and current clients can offer you an insider’s view of the accountant’s ability to manage your type of financial situation, and whether or not they are a good match.
You can also try asking professional organizations such as the AICPA (American Institute of Certified Public Accountants) for a list of people in your area who have the appropriate expertise.
3. Verify Credentials
Researching their background is an important step in how to find an accountant to assist with personal finances. For starters, ensure the accountant you’re eyeing has proper credentials, including a Certified Public Accountant (CPA) or Enrolled Agent (EA). CPAs are licensed have passed rigorous exams and can represent clients before the I.R.S. However, Enrolled Agents are licensed by the IRS and specialize in tax law.
Look up your accountant in the IRS Directory of Federal Tax Return Preparers to make sure they have the necessary credentials.
4. Evaluate Experience
When finding an accountant for personal finances, experience counts. Find an accountant who has a lot of experience working with personal finances, specifically the kind you need to address. If taxes are the most on your mind, look for an accountant with a robust tax preparation background. If you have long-term needs, find someone who has experience in retirement planning or wealth management.
It’s also helpful if the accountant has experience working with clients who also have similar financial situations as you — like owning a business, having a complex investment portfolio or owning multiple properties.
5. Interview Potential Candidates
After you have a list of a couple of possible accountants, the next move in the process of how to find an accountant is to give them an interview. When you meet the potential accountant in person, you're able to judge his or her skills, communication style, and the way they would handle your money.
Some questions to ask the accountant include:
- What do you offer, and how do you tailor your offering to your clients?
- Have you dealt with clients whose finances are similar to mine?
- How do you stay current on tax laws and financial regulations?
This will assist you in getting a feel for how well they can accommodate your needs and whether or not you are comfortable working with them.
6. Discuss Fees
It is also important to evaluate how much an accountant costs. Some accountants work on an hourly basis, others will give you a flat fee for certain services. Make sure to ask about their pricing immediately, and be sure it is in your budget.
The average cost of using a tax service to do your taxes ranges from $150 to $450, depending on the level of complexity of your tax return.
If you’re interested in comprehensive and ongoing financial planning or investment management services, those may also carry additional fees, typically determined as a percentage of assets managed or based on a retainer.
7. Assess Compatibility
One of the last things you can do on how to find an accountant for personal finance is to check compatibility. Your accountant is working with sensitive financial information, it is important you feel comfortable with the person you choose. The key is to establish a relationship of mutual trust, transparency and openness with your accountant.
Notice how the accountant speaks to you - are they comprehensible? Do they do your bidding and cut to your heart and soul with advice that’s tailored? If you get a bad vibe from an accountant during this initial courtship, they might not be the best match for your finances.
Types of Accountants and Their Roles
These are different types of accountants to determine who will best fit your needs:
- Certified Public Accountant (CPA): CPAs are licensed in each of the states, and are generally the best option for complicated financial scenarios. They can help prepare tax returns, offer advice on investment strategies and represent clients before the I.R.S.
- Enrolled Agent (EA): EAs are tax professionals licensed by the IRS to represent taxpayers. If the need to strategize for taxes keeps you up at night, you might want an EA.
- Financial Planner: If you’re mainly focused on long-term goals, such as retirement planning or wealth management, a C.F.P. may make sense. Financial planners often cooperate with accountants to optimize individual financial plans.
- Tax Preparer: Unlike CPAs or EAs, tax preparers might not carry certifications, however for basic tax filings, are adequate.
What to Ask Before Hiring an Accountant
Ask the following questions before you hire to make sure you find the best fit:
- Are you knowledgeable about personal finances?
- Do you understand the financial targets I’m aiming for?
- What is your pricing model? Is there a flat fee or hourly rate?
- Do you have any references from past clients in similar financial situations to me?
- How do you keep yourself informed about the changing tax laws and their implications?
You can ask these questions to get a sense of what you want to get from the accountant, and determine the ability of the accountant to fulfill your needs.
Costs of Hiring a Personal Accountant
The price of an accountant can depend on the services you get and how much help you need with your finances. The cost of tax preparation varies anywhere from $150 to $450 based on the complexity of your return.
For ongoing services like financial planning or wealth management services, fees can vary dramatically, with some charging a percentage of assets under management or a flat fee depending on the services you receive.
Also Read | Do You Really Need an Accountant?
Final Thoughts
To summarize, to answer the question how to find an accountant for personal finance, you must first determine what your interests are, get recommendations, check qualifications, interview the candidates and then make sure you can develop a good relationship with them. From filling out taxes to drawing up a financial plan or choosing the right investment strategy, having the right accountant on board can make a difference in how you handle your payouts and manage your money for the future.
