All expats should have a good relationship with their accountant. Accountants and CPAs are a valuable resource and can help you comply with state and federal tax laws. It’s important to keep in mind that not all tax preparers are created equal. Their degree of knowledge, professional skill, and even ethics can vary tremendously.
It is not unusual for a back tax liability to be caused by an error by the preparer. Even if the preparer is at fault, you are responsible for the tax that would have been due had your return been done correctly and you may still be assessed interest and penalties.
Finding a great expat accountant is a straightforward process. Here are six issues you should consider.
- Specialty. Accountants are a lot like doctors. Some are “general practitioners,” while others specialize in specific issues. Do you simply need help with your taxes, or are there other tasks that you need like tax or business planning? Do you need a Certified Public Accountant? Do you need an Enrolled Agent? Take some time to make a list of your accounting and tax requirements. The more specialized the accountant, the more they are likely to charge for their services.
- Proximity. Determine if it is necessary for you to find a local accountant. Do you need to meet with an accountant face-to face, or can the issue be handled remotely. It is usually less expensive to find an accountant who does not live in your geographic area, and handles requests via the Internet.
- Timing. How soon do you need an accountant? If you are facing a tax deadline, you need to find an accountant quickly. Find accountants who are actively seeking clients. They are more likely to quickly respond to your accounting needs. Be sure to ask each accountant you interview when they can schedule an appointment.
- Investment. If you have a longer-term need, you are more likely to want an accountant who will invest in you personally, and take the time to understand your tax situation. An accountant who is interested in long-term relationships will not only do a better job but save you money in the long run.
- Communication. When you discuss your specific needs and the accountant lets you know how they can help, make sure that you have some rapport. This interview process should put you in a position to decide whether it is a good match. You can also ask questions about pricing, experience, and guarantees.
- Hire. After you have determined that the accountant can solve your tax or business problem, you may enter a service agreement with them. This agreement will tell you what the accountant commits to in terms of standards and accuracy. It also will often define what your obligation is in the relationship.
Finding a quality accountant who deals specifically with expat tax issues is more difficult than it seems. Make sure that you do your due diligence and engage an accountant that you can work well with. This approach will not only provide for a long-term relationship, but will likely result in the lowest tax bill.