The tax deadline is coming closer and you still don’t have a good tax accountant? When you do a Google search for the best expat tax service or similar search terms, you probably first see a couple of ads, maybe even one of ours. We could just say, you can stop your search because you found the best, us … but of course, we are biased.
So how do you decide whom to trust with your tax and financial information? How to select from the expat tax services marketed online and recommendations from friends?
After all, when spending money on getting your taxes done, you want the peace of mind that they are done correctly and tax savings are optimized.
Here we give you a list of questions you should ask a CPA or expatriate tax services firm when looking for an expat tax accountant.
Can you actually talk to a tax accountant before signing up for their services?
First of all, will a tax accountant actually talk to you about your tax situation before asking you to commit? Will you have the chance to ask questions?
Some tax service firms offer flat-fee packages for certain types of returns and/or have an a la carte price menu. You can get started online without talking to a CPA first. But do you already know exactly, which forms you will need for your situation?
A good expat tax CPA offers a consultation to determine which forms you will need and what the final price will be, based on that.
If you decide on a tax preparation package without consultation, make sure you know exactly which forms and services you will need. Also, read the fine print. It may say that the package price “estimate” will go up once the accountant reviews your situation and determines that additional forms are needed.
Expat tax situations can vary widely, for example, if there is a tax treaty or not, if you pay into local social security, high tax vs low tax host country, if you have a business, which type of business. Therefore, it’s difficult to generalize what are the best approach and the forms needed.
If you ask expat tax preparation services specific questions about scope and pricing, pay attention if the person answering you is a marketing person or actually an accountant. Marketing people are rarely in the position to give you a fixed quote for a specific tax situation (see fine print above).
Questions to ask the CPA to find the best tax service for expats
1. What is your experience with expat tax?
This seems a no-brainer, but we see expats losing out on tax savings opportunities because their US-based CPA didn’t know about them. Even the best CPA for US domestic tax returns may not be familiar with forms 2555, 1116, dual resident returns, foreign housing deduction, etc.
Don’t worry if you don’t know these forms or terms, but your CPA should know them in his sleep. You may want to ask with how many Americans living abroad he or she has worked in the last few years.
2. Who will actually be working on my tax return?
When working with a tax accounting firm rather than an individual CPA, you should also ask about the experience of the person who will actually prepare your return and if there is anyone else reviewing it.
Many firms use contractors, very few list their team and experience on their website.
When you just submit all your info on a website portal without talking to anyone, you might be flying blind.
We have seen a client of a big accounting firm’s expat division unable to reach their accountant because they didn’t know who the specific accountant was and had no direct contact info.
3. Can I ask you tax questions throughout the year?
As an expat we are often faced with big changes in our lives that may affect our tax situation – marriage to a foreign spouse, foreign pensions or investment opportunities, moving stateside or to another country …
Will you be able to call up your tax accountant to obtain tax guidance throughout the year? Or would you have to pay extra for that service? (Some firms charge their clients over $200 for such a consultation.)
4. What if you make a mistake on my return? Are you insured?
Mistakes shouldn’t happen, but we are all human. So what if?
A good accountant carries Errors & Omissions Insurance to cover those issues. But many others limit their maximum liability to the fee you paid for their service.
Again, please read the fine print. This is often covered in the Terms of Service or Terms of Engagement or a similarly titled document full of legalese. Or ask during the consultation, which might be easier.
5. What if the IRS has questions about my return? Will you help?
A good tax accounting firm should stand a hundred percent behind the return they prepared. They should handle all questions from the IRS about the return on your behalf without extra charge.
Sometimes the IRS might want a full audit of your books, which would be your responsibility to show receipts. However, a CPA should be available to guide you, not run away from your problems.
6. What is your process?
Expats are on the move. Coming to an office or depending on US business hours is not feasible for many.
Tax documents should only be transmitted via a secure encrypted online portal. A CPA should never send or request tax documents attached to an email.
The tax accounting firm should explain the overall process to you. You should also get your accountant’s contact information, usually an email address and a phone or Skype number.
Additional considerations for freelancers and small business owners to find the best tax accountant
If you plan to incorporate, make sure your CPA asks you about your income levels, location, business/fundraising goals, before recommending a course of action, such as opening an LLC, switching from LLC to S corp, or opening a foreign company.
Get to know your expat tax service before you commit
We hope this list of questions and considerations helps you find the right expat tax accountant or firm to prepare your US tax returns. Enjoy the peace of mind that comes from knowing that you are in good hands and everything will be handled professionally.
If you want to check us out, please schedule your consultation below.