Choosing the Right Tax Professional in 4 Easy Steps

Managing taxes during retirement might be the single most important factor influencing your retirement lifestyle. As you transition from working for an income to withdrawing income from your savings and investments, you might have questions: How can I maximize my income while minimizing income taxes in retirement? How will my Social Security be taxed? Should I be concerned about capital gains taxes when I retire? As we kick off the New Year, it is a great time to evaluate and choose a tax professional who can answer questions such as these and help you with your tax planning needs all year long.

• Check for credentials.  Not all tax preparers are CPAs.  In fact, in many states, anyone can  prepare tax returns and call themselves a tax professional.  Most serious tax professionals will either be a CPA or an EA (Enrolled Agent).  However, this does not necessarily mean that they are competent enough in the retirement area to assist you.
• Ask about experience.  In most cases, you would opt for experience over a novice.Do you really think your choice of a tax professional is that different?  Sometimes, there is no substitute for experience.  Ask your tax professional about cases similar to your own, how often they deal with them and how they typically handle them.
• Ask about education/training.  When most people think “CPA,” they think tax expert. But, the rules governing retirement accounts are highly complex and are constantly changing.  If your tax professional is serious about this area of retirement planning, they will make sure to stay up-to-date on the latest tax law changes.  Make sure to ask about the last conference or continuing education class they have attended on retirement planning.
• Ask about continuity.  Planning to maximize your retirement distributions and transfer your wealth is not a one-time deal.  Some of your most important decisions may not be made for years, or even decades.  If you don’t expect your tax professional to still be working, you may want to ask what type of plan they have in place to make sure you will still receive the high level of advice you deserve when you need it the most. 

In addition to a financial planner and estate planning attorney, a qualified tax professional is an integral part of any planning team.