A business owner evaluating a CPA for their requirements, but they actually don't have all their data security and compliance measures in place.

Don’t Just Check the Box: How to Choose a CPA Who Protects You

Does your current CPA or tax preparer treat their requirements like a simple checkbox? Choosing the right tax preparer is crucial, impacting not just convenience, but your financial security. With increasingly complex tax codes, laws and high stakes, it’s vital to entrust your tax planning to a qualified professional. So as the 2024 tax season wraps up, it’s an ideal moment for both business associates and individuals to reassess their financial planning strategies.

Moreover, the digital era has introduced significant advancements in financial advisors and management alongside heightened risks from cyber threats. Data breaches are on the rise, making the security practices of your tax preparer more critical than ever as they handle sensitive financial statements and information.

We’ll be exploring essential criteria for selecting a tax returns preparer who understands tax law intricacies and prioritizes data security. Everything from their credentials and communication to fees and data protection strategies, ensuring you can make an informed decision. Our goal is to ensure your financial data remains secure by the next tax season, letting you focus on running your business or personal finances.

Let’s delve into identifying the right tax preparer, highlighting what distinguishes true professionals in this essential field.

What are Their Credentials and Qualifications?

When it comes to selecting a tax preparer, trust starts with understanding their credentials. Tax accountants come in various forms, each with different levels of education, expertise, and regulatory oversight. Certified Public Accountants (CPAs), Enrolled Agents (EAs), and Tax Attorneys are at the pinnacle of this profession, known for their rigorous testing requirements and comprehensive knowledge of tax laws.

Choosing a tax accountant who is a member of professional organizations like the American Institute of Certified Public Accountants (AICPA) provides an added layer of assurance. Membership in these organizations signifies a commitment to ethical standards and continuous education, helping ensure that the preparer stays current with the ever-changing tax legislation.

While professional credentials are a critical filter, they should be paired with relevant experience. A tax preparer who has a track record of dealing with tax situations similar to yours can offer invaluable insights and guidance. Additionally, for those with simpler tax needs, modern tax preparation software managed by qualified professionals can often suffice, providing a cost-effective and efficient alternative.

How to a pick the right certified partner.

Do They Allow You to Predictably Budget?

Understanding the fee structure of your tax accountant is crucial to avoid surprises. Accounting services might charge hourly, offer a flat rate for services, or sometimes charge based on the complexity of the tax situation. It’s important to discuss fees upfront and compare quotes from multiple preparers to find the best match for your budget and needs.

Inquiring about the services included in these fees is just as important. Most preparers offer a range of services such as e-filing, which can expedite the processing of your returns and ensure they are filed correctly. Additional services like audit assistance can be invaluable, providing support in the event the Internal Revenue Service (IRS) or the Federal Trade Commission (FTC) questions aspects of your return. Understanding what is included and what might incur additional charges can help you make a predictable budget, as well as a more informed decision.

How Well Do They Communicate?

The importance of communication in a professional relationship cannot be overstressed. It’s essential to choose a tax preparer whose communication style aligns with your preferences and financial plan. Whether you’re a business owner that prefers detailed explanations or just the bottom line, ensuring your preparer understands and respects your communication needs can greatly enhance the relationship.

Availability is another critical factor. Tax issues and questions can arise at any time of the year, even after tax season. Ensuring that your tax preparer is available to address your queries or provide advice on financial decisions throughout the year can be a significant advantage. This kind of ongoing support is particularly important for business owners and individuals with complex portfolios or those experiencing major life changes such as marriage, divorce, or retirement.

Are They Properly Securing Your Data?

Having robust data security is crucial, especially for tax accountants who manage sensitive information. Tax accountants, particularly CPAs and other financial institutions, must comply with the IRS and FTC Safeguards Rule by implementing a comprehensive Written Information Security Plan (WISP). This plan not only ensures compliance, but also details measures for protecting client data both in transit and at rest using secure software and data encryption practices.

And unfortunately if you don’t currently have these requirements in place, the deadlines are already way past due.

A tax preparer’s commitment to security is further demonstrated through a well-defined strategy for handling cyber breaches. This includes protocols for immediate damage control, client communication in the event of breaches, and preventive strategies to avert future incidents. Ensure your tax preparer also maintains robust data backup and recovery systems to minimize disruption from data loss due to various threats and phishing scams.

Additionally, the integration of a Managed Security Service Provider (MSSPs) plays a crucial role in enhancing security. MSSPs manage the IT infrastructure of tax preparation firms, ensuring adherence to cybersecurity best practices and compliance with regulations like SOC or HIPAA. This external support helps create a secure environment that meets today’s standards for CPAs, safeguarding your sensitive tax data.

Do They Have the Right Partner?

For tax strategies, relying solely on internal resources for IT security may no longer suffice given the sophistication of modern cyber threats. Here is where MSSPs play a crucial role. An MSSP provides a wide range of comprehensive security management, including proactive monitoring of the firm’s networks, threat detection, incident response, and recovery capabilities.

The benefits of employing an MSSP include not just heightened security but also access to specialized knowledge that keeps pace with evolving cyber threats. MSSPs, like Nerds Support, are adept at implementing security measures that comply with the latest regulations and can scale as the business grows or as threats evolve, providing peace of mind for both the tax preparer and their clients.

But that’s not all! When searching for a financial adviser, it’s beneficial to ask if they work with an MSSP that is certified, particularly with SOC 2. This partnership is a strong indicator of a tax preparer’s commitment to protecting client data against the ever-growing landscape of cyber threats.

What are Their Red Flags?

While many tax preparers are competent and ethical, it’s important to remain vigilant against potential red flags. Be wary of preparers who guarantee unusually high refunds compared to previous years, especially if such promises are made without a thorough review of your financial details. Pressure to sign incomplete or inaccurate tax liability forms is another serious warning sign, as it can lead to legal issues with the IRS.

Exorbitant fees or fees that are not transparent can also be a red flag. A trustworthy tax preparer should be upfront about their fee structure and explain all charges associated with their services. Lastly, a lack of transparency regarding their qualifications, experience, or how they handle potential data breaches should prompt you to reconsider your choice.

Don’t Just Check the Box!

Choosing the right tax accountant or preparer is a significant decision that affects not only your immediate tax filing needs, but also your broader financial security. By considering their level of experience, qualifications, fee structure, communication style, and particularly their commitment to data security, you can select a professional who will provide not only expertise in tax liability and income taxes, but also peace of mind. Take your time, do your research, and choose a preparer that you feel confident and comfortable with—one who is not only skilled but also values the security and integrity of your data as much as you do.

And if you’re a CPA looking for help with your data security and compliance, consider reaching out to Nerds Support. As a SOC 2 Type 2 certified MSSP, Nerds Support specializes in serving CPAs, providing tailored IT solutions that meet the unique needs of your profession. Don’t just treat your data requirements as a checkbox to mark off; it’s an ongoing commitment that requires continuous attention and expert management.

Contact Nerds Support today to ensure your data security practices are as resilient as they need to be, safeguarding your client’s information and your reputation as a successful company!

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