Questions to Ask When Hiring a CPA
For individuals and small business owners choosing a CPA. Twenty questions covering licensing, who actually prepares your return, fees, planning during the year, audit representation, and how you would leave if it does not work out.
The questions
Open any question for the note
Are you a licensed CPA, and in which states are you licensed?
Why ask it
Anyone may call themselves an accountant or a tax preparer, so confirm the license and check it against your state board's public lookup. Hedging, or a description like CPA supervised, means their work legally has to be reviewed by someone else.
What kind of clients make up most of your practice?
Why ask it
A practice built on individual returns handles a partnership filing differently from one built on closely held businesses. Listen for whether your situation, sole proprietor or S corp or rental portfolio, is their daily work or an occasional favor.
Who will actually prepare my return, and who reviews it before it is filed?
Why ask it
In many firms the partner sells the engagement and a seasonal preparer does the typing. Ask for the name and for the review step, because unreviewed returns are where transposed numbers and forgotten carryforwards survive.
How do you charge: hourly, a flat fee per return, or a monthly retainer?
Why ask it
Hourly billing quietly trains you not to call with questions, which is the opposite of what you want from a tax advisor. A flat or monthly fee looks more expensive on paper and usually buys far more contact.
What would my first year with you cost, all in?
Why ask it
Push for a number that includes the return, any bookkeeping cleanup, the extension, and the phone calls. A quote covering the return alone is how the figure agreed in January stops resembling the invoice that arrives in April.
What do you need from me, in what format, and by what date?
Why ask it
A firm with a real process hands you a written organizer and a cutoff date for filing without an extension. Vagueness here means the April scramble will be yours to manage rather than theirs.
Do you file extensions routinely, and what would that mean for me?
Why ask it
Extensions are ordinary and not a warning sign, but they change nothing about when tax is actually due. What matters is whether they tell you in February or on the evening of April 14th.
How do you handle tax planning during the year, not just at filing?
Why ask it
The line between a preparer and an advisor is whether anyone calls you in October, while you can still change the outcome. Ask for one specific piece of mid-year advice they gave a client and what it changed.
If I get a notice from the IRS or my state, what do you do and what does it cost?
Why ask it
Some firms answer notices caused by their own error at no charge and bill for the rest; others start the clock at the first letter. Settle the policy now, because notices always arrive at an inconvenient moment.
Would you represent me in an audit, and how many audits have you handled?
Why ask it
A CPA is allowed to represent you, but plenty have never sat across from an examiner. Ask whether representation sits inside the engagement letter or becomes a separate hourly arrangement at a higher rate.
How do I get documents to you, and what happens to them afterward?
Why ask it
Emailing W-2s and Social Security numbers is a real exposure that a client portal removes. You also want a plain answer on how long they retain your records and who inside the firm can open them.
How quickly do you answer email in February compared with June?
Why ask it
Every firm slows down in filing season, so the useful answer is a stated window and a named backup person. A promise that they always get back to people gives you nothing to hold them to.
Do you do bookkeeping, or do you expect the books closed before they reach you?
Why ask it
Handing a CPA a bank login and a folder of receipts turns cleanup into billable work at their hourly rate. Find out which system they prefer and whether the quoted fee assumes your books already close monthly.
Looking at last year's return, where do you think I am leaving money on the table?
Why ask it
This is the closest thing to a work sample you get before paying anyone. A prepared candidate points at something concrete: an entity election, a retirement plan option, a depreciation choice made poorly.
Is my current business structure still the right one, and what would changing it involve?
Why ask it
Entity advice is where CPAs diverge most, and an honest answer includes the payroll obligations and filing costs of an S corp rather than only the tax saving. Enthusiasm with no mention of added paperwork is a sales pitch.
When there is an aggressive way to read a rule and a cautious one, how do you decide?
Why ask it
You are trying to place their appetite for risk next to your own. Someone who claims every deduction they can construct and someone who refuses to claim a legitimate home office will each cost you, differently.
Do you coordinate with my attorney and whoever manages my investments, and who starts that conversation?
Why ask it
Coordination between advisors almost never happens on its own, and the gaps show up as surprise tax bills after a sale or a trust change. Ask whether they will pick up the phone or wait to be copied in.
What happens if there is a mistake on a return you prepared?
Why ask it
The amended return, the penalty, and the interest are three separate questions with three separate answers. Firms that stand behind their work say plainly that they cover penalties and interest caused by their error, in writing.
What is your plan for time off, illness, or eventual retirement?
Why ask it
A sole practitioner close to retirement can be an excellent choice as long as you know it going in. Ask specifically who files your returns if they are unavailable during March.
If I decide to leave, how do I get my records, and what would you send my next CPA?
Why ask it
Your source documents belong to you, and the depreciation schedules, basis records, and carryforwards are what make a handoff survivable. A firm that stalls on this question now will stall at the exit too.
How to Choose a CPA
Practical guidance for the conversation itself
Before You Start Calling
Write Down What You Actually Need
A single wage earner with one rental needs something very different from a company running payroll in three states. List your filings, your entities, whether your books are current, and any open issues such as unfiled years or a pending sale. Candidates can price honestly against that list and cannot price honestly without it.
Verify the License Yourself
Every state board publishes a licensee lookup showing status and disciplinary history. It takes two minutes and occasionally saves you from a lapsed license or an unrelated person with the same name. Do this before the first meeting, not after you have handed over documents.
Bring Last Year's Return to the Meeting
A prior return turns a general conversation into a specific one. Watch whether they look at it, and whether they notice anything. The candidate who spots an unclaimed election or a questionable classification in ten minutes has told you more than any brochure.
Interview in Summer or Early Fall if You Can
Nobody good has time to court you in March. Late spring through early autumn is when you get the actual partner's attention, and it is also when planning still has room to work for the current year.
How to Read the Answers
- A promised refund figure before anyone has seen your documents is a sales tactic. Refunds depend on your numbers, not on who prepares the return.
- Watch who they blame when they describe a difficult client. A firm that describes every past dispute as the client's fault will describe you the same way.
- Fee reluctance is informative. A candidate who will not put a range in writing after seeing your prior return either has not priced the work or is planning to reprice it later.
- Listen for whether they ask about your life rather than only your ledger: a planned sale, a new child, a move between states, an inheritance. Those events drive most of the tax you can still control.
- A refusal to sign the return as preparer, or a request to be paid from your refund, both point away from a licensed practice.
- The phrase everybody does it, applied to a deduction, is not a legal standard. Ask instead what documentation the position would need if it were examined.
Before You Sign the Engagement Letter
- 1Confirm the scope in writing: which returns, which entities, which years, and whether bookkeeping is included.
- 2Confirm the fee basis and what triggers additional billing, including responses to notices.
- 3Confirm who prepares and who reviews, by name and role.
- 4Confirm the response time you were promised and the backup contact during filing season.
- 5Confirm the error policy: who pays penalties and interest arising from a preparer mistake.
- 6Confirm how records are transmitted and stored, and how long they are kept.
Common Pitfalls
Choosing on Price Alone
A cheap return is cheap because someone junior prepared it quickly and nobody reviewed it. The cost of a missed election or an unclaimed carryforward usually exceeds several years of fee difference, and you will not learn about it until the year you need it.
Confusing Compliance With Advice
Most CPAs will file accurately. Fewer will tell you in September that your estimated payments are wrong or that your entity no longer fits. If planning matters to you, buy it explicitly and expect it to appear as a line item rather than a courtesy.
Letting the Books Slide and Blaming the CPA
Late, disorganized records are the single most common reason engagements sour. Either close your books monthly or pay someone to, then judge the CPA on what they do with clean numbers.
Losing Track of Basis and Carryforwards
Depreciation schedules, partnership basis, capital loss carryforwards, and prior state credits live in the preparer's software. Ask for copies each year and keep them yourself. Reconstructing them after a firm closes or a relationship ends is slow and sometimes impossible.