It’s Time to Hire a CPA: What You Need to Do

August 23, 2022

Do you get anxious or stressed when tax time rolls around? If you have never worked with a Certified Public Accountant (CPA) for tax preparation, now may be the time to consider it. With the ever changing tax laws you may be missing out on important deductions. Starting the process in August rather than waiting until next year may save you from headaches.

What should you expect of a CPA?

First and foremost, expect your accountant to file your tax return accurately and on time. Reputable accountants do more than complete and file your return; they also represent you if an audit is requested by the Internal Revenue Service (IRS), and they keep electronic copies of your tax return.

How should you prepare to meet with an accountant?

Preparation is key to a successful first meeting. You may want to arrange a phone call before your first in person meeting.

  • Begin by asking for a breakdown of the fees you may incur. Some fees are optional, so choose those you need and/or what makes you most comfortable.
  • You should tell the accountant what documents you have and ask what else, if anything, you need to bring to the meeting.
  • With what you need in-hand, ask if there is a particular way to organize your documents that will make tax preparation easier and filing faster?

Now that you know what you need and how to organize it, schedule an in-person meeting.

How long should you keep your tax return and supporting documents?

According to the IRS you should:

  1. Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
  2. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
  3. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
  4. Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
  5. Keep records indefinitely if you do not file a return.
  6. Keep records indefinitely if you file a fraudulent return.
  7. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.1

The Pennsylvania Office of the Attorney General reminds people

“to safeguard “paperwork that includes personal and financial information – like your tax returns and forms – to protect you from identity theft.

  • Keep tax paperwork in a safe location.
  • Shred any documents that are no longer needed.
  • If you are filing online, make sure you have an updated firewall, antivirus and spyware software installed on your computer.
  • Do not leave tax documents in an open outgoing mailbox. Take them directly to the Post Office or mailbox.”

When you use a CPA some of these concerns will be moot. He/she will be responsible for either filing online or mailing your returns.

When your taxes are completed your tax return and all related documents will be returned to you. Keep them filed together in a safe place. They will help you:

  • Prepare for the following tax year. Although your accountant keeps electronic files of your return, you should keep all your supporting documents for the designated amount of time as outlined above.
  • In case they are required by a lending organization as proof of income for a loan.
  • If you or your child is applying for federal student aid by filing a FAFSA (Free Application for Federal Student Aid).
  • If you need to file an amendment within three years.

This blog provides summary information regarding the subject matter at the time of publishing. Please call our office at 610-296-2500 with any questions on how this information may impact your situation. Remember, call our office to learn what you need to prepare for your 2022 taxes.

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