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CPA/Financial Planner where is the line drawn?
Posted on 1/26/15 at 1:05 pm
Posted on 1/26/15 at 1:05 pm
Ok, so my wife and I have a CPA who prepares our taxes. Shouldn't he offer advice on how to legally shelter some of our tax dollars, or would that duty fall to a financial planner? We pay the CPA around $350 so we figure that we should be getting a little more service than what TurboTax offers (our tax situation has been a little complicated, so we don't do them ourselves).
7
Posted on 1/26/15 at 1:51 pm to TJG210
You're mistaken. The CPA is an accountant. He is not a certified financial planner. If you want tax planning, find the right person. Sure, you may find a CPA who is also a CFP....but don't expect your tax preparer to handle your financial planning.
Do you expect your waiter to give you diet & nutrition advice?
Do you expect your waiter to give you diet & nutrition advice?
Posted on 1/26/15 at 1:51 pm to TJG210
He/she should be offering options to reduce your tax liability, but if your looking for him/her to offer non-solicited investment advice your in the wrong office.
Posted on 1/26/15 at 1:51 pm to TJG210
Depends. Some CPAs are very savvy and some just know taxes well. My company specializes qualified plans and 90% of our business comes through CPA referrals but most of the time we have to educate them on what is out there.
Posted on 1/26/15 at 2:02 pm to SippyCup
quote:
He/she should be offering options to reduce your tax liability
See this is exactly what I want, and don't feel we're getting. We met with him one time prior to the first time he did our taxes, but past that we've just dropped off the tax forms and that's it.
Should we schedule a time to meet with him, or do you ask them to prepare some type of report to convey this info. I really feel like the last couple years we've really gotten screwed because we employed a full time nanny to watch our children, but in the end we ended up paying through the nose on taxes for that on top of our regular taxes, with no suggestion on how to limit that.
Posted on 1/26/15 at 2:07 pm to TJG210
quote:
Should we schedule a time to meet with him
I would so as to communicate your expectations of his service. He may not know you need guidance on ways to reduce your tax liability beyond what he provides. He is probably doing all he can to reduce your liability from what you provide him.
Posted on 1/26/15 at 2:20 pm to TJG210
A lot of CPAs, especially single-guy shops, are overworked and terrible at organization. It's all they can do to get the returns out on time.
But there are ones out there that are more pro-active. At our firm, we will try to identify ways to save on taxes. Admittedly, that's easier to do with clients who have their own business.
When you have your stuff ready, rather than mailing it in, call the CPA up and ask to come in and say you would like to discuss some opportunities to save on your taxes. When the return is ready to pick up, go and pick it up and ask them to go over it with you. If the guy is worth anything, he will. But, it will be generic advise, such as, "increase your 401K contribution" or "double up on property tax payments in the same year" as opposed to advise like "Invest in XYZ stock".
But there are ones out there that are more pro-active. At our firm, we will try to identify ways to save on taxes. Admittedly, that's easier to do with clients who have their own business.
When you have your stuff ready, rather than mailing it in, call the CPA up and ask to come in and say you would like to discuss some opportunities to save on your taxes. When the return is ready to pick up, go and pick it up and ask them to go over it with you. If the guy is worth anything, he will. But, it will be generic advise, such as, "increase your 401K contribution" or "double up on property tax payments in the same year" as opposed to advise like "Invest in XYZ stock".
Posted on 1/26/15 at 2:23 pm to LSUFanHouston
quote:
A lot of CPAs, especially single-guy shops, are overworked and terrible at organization. It's all they can do to get the returns out on time.
I think his place has several other CPA's.
quote:
But, it will be generic advise, such as, "increase your 401K contribution" or "double up on property tax payments in the same year" as opposed to advise like "Invest in XYZ stock".
Yea, and I think is mostly what I'm looking for. Do I need more to charity for write-downs? Do I contribute more to 401ks/college savings plans?
Posted on 1/26/15 at 3:36 pm to TJG210
Granted there should be some unsolicited advice given if you have recurring issues or missed opportunities. But have you asked your CPA for advice?
Posted on 1/26/15 at 6:10 pm to Poodlebrain
I know this does not help you at all, but hopefully it will further the conversation in the future... As an anonymous CFP, I find that most CPA's have no idea about planning for the future and generally just tell you to save $X,XXX into an IRA to save $XXX with absolutely NO focus on the future, only on saying they saved you money this year. Sometimes that is the best plan for someone, most times it is not.
I guess it's just a warning to watch out for this too (even though it seems like a step up from what you are getting). My $0.02.
I guess it's just a warning to watch out for this too (even though it seems like a step up from what you are getting). My $0.02.
Posted on 1/26/15 at 6:31 pm to Hiphopapatamous
quote:
As an anonymous CFP, I find that most CPA's have no idea about planning for the future and generally just tell you to save $X,XXX into an IRA to save $XXX with absolutely NO focus on the future
This is pure unadulterated BS.
Posted on 1/26/15 at 6:51 pm to TJG210
$350 is not a lot. If you expect to sit down with the CPA every year that will double at a minimum.
Posted on 1/26/15 at 7:18 pm to tigeralum06
quote:
$350 is not a lot. If you expect to sit down with the CPA every year that will double at a minimum.
This. A good CPA runs about $250-$300/hr.
Posted on 1/26/15 at 9:18 pm to Hiphopapatamous
quote:
Hiphopapatamous
I don't think that is an unreasonable statement. The goal of most tax CPAs is to maximize after-tax income for our clients. Most of us are not CFPs and are not in a position to recommend specific investments. However, saving money (or more specifically, not wasting money) is generally a good thing, and every dollar you don't have to pay to the government is a dollar you can use for something else.
Posted on 1/26/15 at 9:49 pm to LSUFanHouston
If you're paying a CPA $350 to file your taxes during busy season, they are certainly not going to plan your estate too.
Posted on 1/26/15 at 11:57 pm to TJG210
quote:
$350
You're just getting a basic tax return. If you're willing to pay for the CPAs time I'm sure he'd talk to you about ways to save.
But with that said, if you're just a basic return type of client, there probably isn't much planning that can be done.
This post was edited on 1/27/15 at 12:00 am
Posted on 1/27/15 at 12:10 am to Hiphopapatamous
quote:
I know this does not help you at all, but hopefully it will further the conversation in the future... As an anonymous CFP, I find that most CPA's have no idea about planning for the future and generally just tell you to save $X,XXX into an IRA to save $XXX with absolutely NO focus on the future, only on saying they saved you money this year. Sometimes that is the best plan for someone, most times it is not.
That's because most people go into the cpa in feb and ask how they can lower their taxes now. Well there's nothing you can do now.
Posted on 1/27/15 at 2:08 pm to SippyCup
quote:
He/she should be offering options to reduce your tax liability, but if your looking for him/her to offer non-solicited investment advice your in the wrong office.
This is the correct answer. Most CPAs are very conservative with "advice". You have to really pick their brains. I am a CPA but not in that industry. Ask them what their other clients are doing etc. Not what their other clients income is or ssn. Get some ideas. They can usually point you in the right direction.
Most people think there is a silver bullet to reducing tax liability. Heck most people think they should buy a vehicle at year end or spend more money to reduce expenses. I used to always explain to people why buy something unless you need it? Otherwise you are spending $1 to save $0.20.
Unless you are a high net-worth client there are not a lot of ways to reduce your tax liability outside of getting deferred retirement plans or similar things.
Posted on 1/27/15 at 8:45 pm to lsu13lsu
This. While giving to charities and accelerating deductions is great for income tax proposes, you won't receive more of a benefit by giving that dollar away rather than keeping it yourself. A good cpa will remind you of common deductions you receive benefits for while spending your money. For example, an HSA, assuming you are under a qualified high deductible plan or the La. Deduction for school expenses. Common things like that can go a long way. Whatever you do, dont blame a CPA for being "screwed" because of owing taxes. CPAs comply with the law, they don't create it.
Posted on 1/27/15 at 8:50 pm to TJG210
quote:
See this is exactly what I want, and don't feel we're getting.
For $350 you are asking a lot. I agree with what others have suggested that you actually convey these needs to the CPA to see if its advice he is even interested in giving/charging for.
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