Last year, there were some minor complications with my move the prior year, so I hired a CPA to prepare my taxes. The CPA I hired also provides tax advice. He was really helpful at helping me figure out how I wanted to split my investments (between my 401(k), what type of IRA, and taxable accounts) to achieve the best taxation and helping me see how amazing contributing to the traditional 401(k) is for my income tax liability!
One thing I learned last year is that it makes the process a lot easier for both sides (client and CPA) when you have all of the documents required to prepare your income tax return before sending any off to your CPA. Last year, I really had no idea where to expect documents from, so I thought I had them all, but then more kept on showing up in the mail. I didn’t know that Vanguard was going to send me a form for contributing to a Roth IRA or that having stocks vest really counts as buying and selling stocks, so the brokerage firm would send me a 1099.
After that experience last year, I was on the ball this year. I made a list of every institution that paid me interest throughout the year and made a task to check for a 1099-INT from each one on January 31st. I made a reminder to check for my W-2. I also made reminders for Vanguard and for the brokerage firm where I receive my stock vests. As each document came in, I checked it off. When they had all arrived, I scanned in the paper ones and emailed all of the documents to my CPA with several questions about my tax situation.
Regardless of whether I use my CPA again next year or I use TurboTax (or some other software), I will definitely be using the same checklist system and waiting until all documents come in before starting any preparation other than back-of-envelope calculations on my refund status.
Readers, do you use a CPA? Why or why not?