Considering a new accountant?

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jkushne1
Posts: 107
Joined: Sun Nov 23, 2014 8:20 pm

Considering a new accountant?

Post by jkushne1 »

Currently a medical resident but will be graduating soon. My tax returns have been relatively uncomplicated thus far and I've always used my family's CPA who has done a fine job with the preparation. He has always been good at answering my questions (especially after I've done my own reading on a topic) and prepared my returns in a timely fashion and seems very knowledgeable. However, he rarely offers additional suggestions throughout the year to help reduce my overall tax burden. Maybe that was because I had an uncomplicated return being a resident (with spouse/child) or maybe that's just the way he operates.

Other than the WCI blog, I've starting reading the Wealthy Accountant blog as well (http://wealthyaccountant.com/), who also happens to be Mr Money Mustache's accountant. He frequently puts out several posts about other legal ways to take advantage of the tax code (beyond the basic retirement accounts, HSA, etc...) and suggests that accountants should be helping their clients throughout the year by making suggestions. I know my returns will likely get more complicated after I become an attending (more income, possible partnership/consulting/real estate, etc...) and am entertaining the idea of whether it makes sense to get other opinions. I also reached out to the wealthy accountant directly to see if he takes consultations but I'm guessing someone in high demand will likely charge a few hundred dollars even for the consultation fee and may have limited contact during tax season due to demand. I'm not opposed to reasonable pay for good advice but just curious on getting some thoughts from those who have more experience than I do. I already do a decent amount of tax reading on my own (but have no desire at this point to do my own preparation though) but just wondering when it makes sense to look for a new accountant and the best avenues to do so. Thanks!
financialbronson
Posts: 11
Joined: Sat Jul 15, 2017 11:01 am
Location: #PNW

Re: Considering a new accountant?

Post by financialbronson »

We recently went through a structure change in my practice. We used an older accountant who just "set it up" without really giving options or details. We have grown considerably and have been forced to change accountants because now we are "too big for them". Now that I have been done with residency and am not so naive about business culture and practice here is what I had wished I had known:

Ask some of these questions:
When you finish and become the 'attending' are you going to work for a hospital or in private practice? Or both?
If you are working for a larger group will you be an employee forever or will you have the option to 'buy in' and have a stake in the game as your own boss?
When you 'buy in' or 'become partner' what are you buying? Cash on hand or good will or assets of the practice? This may factor into how you do your taxes or how you 'buy in'.
I would set some short term goals and long term goals and shop around to firms or individuals or match your goals. Don't pick some guy who is 60 who is going to retire on you in 2 years.
Make sure you have an attorney review all your contracts and communicate with your CPA regarding structure of your practice (Corporation LLC, PLLC, etc.) and see if everything lines up with your goals.
Ask for quotes and prices. If a CPA refuses to tell you up front their fees then walk away. Many people see "Dr." and think "cash cow" and will up charge.

Good luck with your loans and your practice!
Dr. B
Yes Have Some
Ron Scott
Posts: 1090
Joined: Tue Apr 05, 2016 5:38 am

Re: Considering a new accountant?

Post by Ron Scott »

I don't think you're doing anything that requires a new accountant. The important thing is to have a GOOD one.

I've used the same accountant for about 12 years. During that time my net worth has jumped 40X and I've had several complicated years that required upfront planning. My stock incentive plans have been interesting for years, with a combination of options, restricted shares and ESOP contributions. I retired this year, with a sizeable package, a big NUA, a IRA, Roth and a several pension plans. We've got multiple inherited IRAs and 5 properties across multiple states.

I used to talk with him once a year, now we meet twice. I review my asset allocation and location plans and have started to discuss how to withdraw for living expenses on a tax efficient. He's on top of it all.

My suggestion is to have a discussion with him about your needs and see where it takes you. You're doing the right thing by reading and learning; I will never stop doing that and consider it my job now. But if your guy can adjust and execute you could be fine.

Final note: There's a difference between a tax accountant and an investment advisor. I like my accountant to comment intelligently on my investments and he does. But I don't want him to cross the line or recommend arcane investment plans because they're cute taxwise. You might feel differently.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.
financialbronson
Posts: 11
Joined: Sat Jul 15, 2017 11:01 am
Location: #PNW

Re: Considering a new accountant?

Post by financialbronson »

Ron Scott wrote:
Final note: There's a difference between a tax accountant and an investment advisor.
Ron Scott, maybe should open another thread so as to not hijack the OP, but what do you look for in an investment advisor?
Typical fees?
Should a person even get one?
What are the qualifications of such a person usually?
Thanks,
B
Yes Have Some
Ron Scott
Posts: 1090
Joined: Tue Apr 05, 2016 5:38 am

Re: Considering a new accountant?

Post by Ron Scott »

financialbronson wrote:
Ron Scott wrote:
Final note: There's a difference between a tax accountant and an investment advisor.
Ron Scott, maybe should open another thread so as to not hijack the OP, but what do you look for in an investment advisor?
Typical fees?
Should a person even get one?
What are the qualifications of such a person usually?
Thanks,
B
My personal belief is that these people are not dollar-covered gods who walk among us. I've used AYCO ($10k a year flat), Goldman, and Merrill in the past and followed little of their advice. Finally ended up with VG's Flagship Select ("free"service). I follow a typical Bogle-like allocation strategy and textbook asset location approach and am not open to advice about active funds or other beat-the-market schemes.

But even within the boring Bogle world there are important decisions to make. Here are some examples where Vanguard has been helpful:

1, How do you allocate your municipal bond investments across short term, intermediate term, and long term funds in a taxable account? Vanguard suggests 30-40-30, and has some pretty good rationale. And when I became skittish about putting too much money in long term fund Vanguard suggested a New York muni fund, which not only gives me additional tax benefits but has a maturity much shorter than traditional long-term funds. I followed the recommendation.

2. Vanguard also suggested, contrary to my original plan, I put about 15% of my IRA in equities. I had planned to put all of it in their total bond fund. The Vanguard recommendation gives me some leverage to rebalance out of equities if necessary within the IRA and without incurring any tax liability.

What I look for in a financial advisor is someone who understands how I personally want to invest my money and then works within my framework to help me do it wisely. And I simply take a leap of faith in assuming Vanguard has placed qualified people in positions to advise their flagship select customers.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.
Lafder
Posts: 4127
Joined: Sat Aug 03, 2013 7:56 pm
Location: East of the Rio Grande

Re: Considering a new accountant?

Post by Lafder »

My accountant does not give me a lot of suggestions. But she asks for types of expenses and receipts to optimize my tax return.

She has always been good at answering my questions.

I brought up a solo401k to her instead of a SEP. And indeed it is better.

I would stick with the "good" accountant you have and supplement what you know and are doing here and with other financial advice sources.

If at some point, the accountant you are using is falling short, change then. Or bring your tax return to a new accountant and see if they would do anything differently and decide if you want to change then.

Some people still do their own returns even with a lot of income and investments :o

lafder
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