Broker Check
TAX SEASON | How Well Do You Know Your Tax Professional?

TAX SEASON | How Well Do You Know Your Tax Professional?

February 16, 2023

Tax season is here; if you are searching for a tax professional or are working with your current tax professional, you need to know what questions to ask. Not all tax professionals are equal, and it is up to you to do your due diligence; you need to be informed when choosing or remaining with a tax professional.

Regarding retirement income, we often reference the three-legged stool approach or, in other words, three sources of retirement income; pension, social security, and savings. The three-legged stool analogy also applies to the trio of financial professionals that can help you plan for retirement. They are a financial planner, an estate planning attorney, and a tax professional. How much do you know about the person doing your taxes?

Choosing the Right Tax Professional in 5 Easy Steps…

Why do you need a tax professional? Managing taxes during retirement will be the single most important factor in determining your ultimate lifestyle. In addition to a financial planner and estate planning attorney, a qualified tax professional is integral to any planning team.

  1. Ask for references. Have you ever stopped to think about how you picked your doctor or mechanic? Chances are you chose them because a friend or family member recommended them based on a positive experience. The same should be true of your tax professional. Oftentimes, people are afraid to ask for advice from those closest to them when finances are involved, but picking the right tax professional is too big of a decision, so “do your homework” and ask around.
  2. 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 they are competent enough in the retirement area to assist you.
  3. 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 like yours, how often they deal with them, and how they typically handle them.
  4. Ask about education/training. When most people think “CPA,” they think of 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 ensure to stay up to date on the latest tax law changes. Make sure to ask about the last conference or continuing education class they attended on retirement planning.
  5. 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 be still working, you may want to ask what type of plan they have to ensure you will still receive the high level of advice you deserve when you need it the most.

Copyright © 2023, Ed Slott and Company, LLC- Reprinted with permission. Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

To better serve you, I have provided a link below called the 2022/2023 TAX SEASON GUIDE; click on the link to learn more. Dixon Financial Group cannot give tax advice, but we are here to guide you through the process regarding your investments and provide suggestions now to help reduce your tax liability in the future. Please call the DFG Team so we can answer your questions, and let us be a part of your retirement three-legged stool.


David S. Dixon, CFP® and the DFG Team.