Inquiries to Ask a Tax Advisor

John Grobe

We’re getting close to tax time and many readers are beginning to organize their tax information in preparation for filing their tax returns. If you’re a regular reader of the TSP Investment Report, you know that taxes are confusing and that taxes on the TSP and IRAs are no exception. You might be thinking that it’s time to use a professional to prepare your federal and state income taxes. Here are six things (not necessarily specific to retirement investments) to consider if you are looking for a tax professional.

1) If you’re seeking a professional tax advisor, go about it as if you were seeking any other trusted advisor. I bet you chose your doctor or your mechanic (I was an auto mechanic once) because of a recommendation from a friend or family member. Ask those close to you (or those in a similar situation to yours) who they use for their taxes. Then ask them why they use that person. I’ve used the same CPA for my taxes for over 25 years, I met him at a Chamber of Commerce meeting, and he is scrupulously honest when it comes to tax law.

2) See what credentials they have. Most serious tax professionals will either be a CPA (Certified Public Accountant) of an EA (Enrolled Agent). Do keep in mind that some tax advisors who know their stuff have neither designation.

3) In most cases we prefer those who have experience over those who are just beginning. Ask the tax professional about how long they have been in their area of expertise and compare that to what you need. Ask them how they deal with situations that are similar to yours (e.g., federal retiree, military retiree, etc.).

4) What education and training do they have? What did they study in college? Do they have a Masters degree in taxation? Do they keep up-to-date in the ever changing tax law? Ask them about their continuing professional education and what areas their most recent CPE covered.

5) Ask about continuity. Depending upon your age, you might be filing tax returns for decades to come. Some of your most important decisions might not be made for years, or even decades. If you’re concerned that your tax professional might be retired when these decisions need to be made, ask them what plans they have in place to ensure continuity of advice. Will they, or their firm, continue to represent you in tax matters before the Internal Revenue Service or others? Those tax professionals who are with a firm would be able to have other employees of the firm pick up your case.

6) Don’t forget to ask about their fees. Fees can put a dent in your budget, but money well spent on professional advice can save you money over the long run.

And here’s a point for those readers who are retired. Make sure that your tax professional understands the rules that apply to retirement accounts – especially federal pensions. If you need professional help, make sure that the help you get is the help you need.

Interest Rates are Rising: Good for Some Assets, Bad for Others

Lessons Learned Growing a TSP Balance Beyond $1M

How Will You Use Your TSP When You Retire?

What it Takes to Be a TSP Millionaire in Today’s Dollars

FERS Retirement Bundle: 2021 FERS Guide & TSP Handbook