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Anjali Jariwala has been a financial planner for six years, but she started her career in 2006 as a certified public accountant.
Jariwala’s years as a CPA were spent working with Fortune 500 companies, and her background knowledge in taxes has served her well as a financial planner. She told Insider that she is often “a second pair of eyes” overlooking her clients’ tax returns when they’re working with CPAs.
When asked how someone can go about finding a good accountant, she replied: “It’s very difficult, to be honest.”
That said, if you are looking to hire an accountant, there are three important questions to ask yourself as you begin your search.
1. What kind of accountant do I actually need?
Jariwala said there are many different types of accountants, and that there are two kinds in particular between which people should know the difference.
CPAs are required to complete a four-part exam, have an advanced degree in accounting, and must gain a few years of experience in public accounting before they are awarded their license.
Enrolled Agents are licensed by the IRS after taking a Special Enrollment Examination and have no specific education requirements.
According to Jariwala, CPAs can provide a wider variety of services to clients due to their credentials, but EAs have “purely just a tax focus.”
2. How proactive do I need this accountant to be?
The next question she said that you’ll want to ask yourself is about how proactive you want your new accountant to be, based on your own personal needs.
“Do you just need someone to prepare your return,” asked Jariwala. “Or do you need someone who you’re regularly checking in with on things that are coming up, like estimated tax payments and on projections?”
She added that this question is particularly important for people who are self-employed, who often have much more complicated taxes than other people. “If you’re a business owner or an independent contractor, you want to make sure you find someone who has navigated that space,” she said.
3. Does the accountant have expertise in my state’s tax laws?
Jariwala said the location of your accountant doesn’t matter much — as long as they have clients who live in the state that you reside in. You should make sure that if you’re going to hire an accountant, they are familiar with the tax codes of your specific state.
She stressed that this particular question is extra important for people who live in her home state, California.
“California has unique rules that are very different from other states’ rules,” she said. In particular, she described the California Franchise Tax Board as “super aggressive.”
New Yorkers and residents of Pennsylvania may also want to make sure that their accountant is familiar with the tax laws of their states. “You’re going to want someone who’s also going to stay on top of changing local laws,” she added.