Do I need a CPA, CFP or something else?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
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Trying2learn
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Joined: Sat Apr 08, 2017 4:12 pm

Do I need a CPA, CFP or something else?

Post by Trying2learn »

I would rather not need any of the above but I am looking for advice on a few things, such as-
- I missed filing a specific, uncommon tax form for a previous year. I had always filed taxes on my own and had no knowledge of the error until it was too late. I had to fix this error quickly and hired a tax attorney. I would like to have a mid-year review with a CPA (or similar) to make sure 2021 is error-free.
- I want to make sure I am sufficiently insured
- I want advice on how much I should cap my child's 529 (I made a recent post on this) and put the rest into a taxable brokerage account for LO for their future, and advice on how I would dole out the gift from the latter tax efficiently

I consider myself somewhat knowledgeable about finances but certainly do not have the level of expertise some on this board have. I would really, really like to avoid having to meet with more than one person for this, so who is more fit to answer my questions, a CPA or CFP? There is also an Enrolled Agent a friend referred me to, who is apparently very well informed in all things financial, but lacks the CPA designation, would an EA meet my needs?
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kelway
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Location: Nashville, TN, USA

Re: Do I need a CPA, CFP or something else?

Post by kelway »

IMO, this board is far more valuable than help you'd get from any of them.

I dropped $2500 on a CFP for a pre-retirement plan and highly regret it as I ended up with a bunch of charts I could have generated myself and very little valuable new information.
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Sandtrap
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Re: Do I need a CPA, CFP or something else?

Post by Sandtrap »

CPA

Also

Ask specific questions on this forum for help. There are many career professionals here.

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bradinsky
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Location: Ohio

Re: Do I need a CPA, CFP or something else?

Post by bradinsky »

When we transitioned from business owners to retirement, we retained the same CPA that we has used. I think we pay him about $300 per year to take care of taxes. We have SS, (1) rental property & our accounts at Schwab. Money well spent! SWAN!!
JBTX
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Re: Do I need a CPA, CFP or something else?

Post by JBTX »

Trying2learn wrote: ↑Sun Sep 19, 2021 7:04 pm I would rather not need any of the above but I am looking for advice on a few things, such as-
- I missed filing a specific, uncommon tax form for a previous year. I had always filed taxes on my own and had no knowledge of the error until it was too late. I had to fix this error quickly and hired a tax attorney. I would like to have a mid-year review with a CPA (or similar) to make sure 2021 is error-free.
- I want to make sure I am sufficiently insured
- I want advice on how much I should cap my child's 529 (I made a recent post on this) and put the rest into a taxable brokerage account for LO for their future, and advice on how I would dole out the gift from the latter tax efficiently

I consider myself somewhat knowledgeable about finances but certainly do not have the level of expertise some on this board have. I would really, really like to avoid having to meet with more than one person for this, so who is more fit to answer my questions, a CPA or CFP? There is also an Enrolled Agent a friend referred me to, who is apparently very well informed in all things financial, but lacks the CPA designation, would an EA meet my needs?
I would imagine you can hire a CPA to review your work for a reasonable fee. Get some referrals and talk to a few. I don't know about the seriousness of the particular form you filed late but I wouldn't let it freak you out. With tens of millions of tax returns most of them aren't perfect. Risk of audit is usually low, and quite often that comes in a form of a mailed question that you simply respond to.

In Terms of life insurance, use term insurance, and use something like 5-20 times salary, depending on age and how much you’d want to replace.

As to the 529, I'm not sure I'd spend a ton of money figuring out how to fund it. I'd probably fund it somewhere in the range of 50% of a 4 year state school degree per kid to a max of 100% of the same, with the rest in taxable accounts or cash flow. People get way to caught up worrying about college funding.
tibbitts
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Joined: Tue Feb 27, 2007 5:50 pm

Re: Do I need a CPA, CFP or something else?

Post by tibbitts »

I don't know about hiring a CPA for a "review" looking for errors, because it might take as long or longer to review what someone else has done than to start from scratch. I'm not sure why you want to bundle insurance with the rest of the issues - I'd ask that question here first.
fourwheelcycle
Posts: 1968
Joined: Sun May 25, 2014 5:55 pm

Re: Do I need a CPA, CFP or something else?

Post by fourwheelcycle »

Trying2learn wrote: ↑Sun Sep 19, 2021 7:04 pm - I missed filing a specific, uncommon tax form for a previous year. I had always filed taxes on my own and had no knowledge of the error until it was too late. I had to fix this error quickly and hired a tax attorney. I would like to have a mid-year review with a CPA (or similar) to make sure 2021 is error-free.

You need to tell us more about your tax situation. If you missed a form for a business you run yourself, you may need a CPA who is experienced with taxes for your type of business. If you missed a form for your own personal taxes, and you have not completed any new, complex investments or real estate sales during this tax year, you should be able to learn from your mistake and move forward. There are plenty of people on this forum who can advise you on 401k transfers and rollovers, Roth conversions, house sales, etc. If you missed a form by not using TurboTax, or not following TurboTax's questions properly, that is also something you should be able to do yourself, even if you only use TurboTax as a shadow guide to help you complete the forms yourself. If you still want to see a CPA, be sure to select one who is specifically experienced in the tax area you are concerned about.

- I want to make sure I am sufficiently insured

We need to know what risks you are concerned about. If you run a business, you may need to speak to an experienced insurance agent who is familiar with your type of business; ditto if you are concerned about malpractice insurance for your particular profession. If you are concerned about damage and liability insurance for your home or your cars, or umbrella insurance, you can rely on this forum. There are many threads on the right limits for umbrella insurance in relation to your personal assets.

- I want advice on how much I should cap my child's 529 (I made a recent post on this) and put the rest into a taxable brokerage account for LO for their future, and advice on how I would dole out the gift from the latter tax efficiently

This is a very common question on this forum, including your own thread. No CPA or CFP can give you the one right answer. In fact, you would be better off choosing among the breadth of different opinions offered on this forum. Any opinion you get from a CPA or CFP will only be their "one" opinion. If there was a professional consensus on this topic among CPAs or CFPs you would see it discussed on this forum.

I consider myself somewhat knowledgeable about finances but certainly do not have the level of expertise some on this board have. I would really, really like to avoid having to meet with more than one person for this, so who is more fit to answer my questions, a CPA or CFP? There is also an Enrolled Agent a friend referred me to, who is apparently very well informed in all things financial, but lacks the CPA designation, would an EA meet my needs?

Even an enrolled agent will only be truly knowledgeable in the tax areas they have actually had experience with, and there is no reason an enrolled agent would be qualified to advise you on business, professional, or personal insurance, or on 529 strategies.
neverpanic
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Re: Do I need a CPA, CFP or something else?

Post by neverpanic »

Trying2learn wrote: ↑Sun Sep 19, 2021 7:04 pm I had to fix this error quickly and hired a tax attorney.
I made this mistake before, too. Dump the tax attorney. Unless you're heading to Tax Court (you're not), you'll prefer an EA for any compliance concerns.

Regarding the other concerns, your lead advisors should be your CPA and this forum. And stop doing your own taxes - that's what your CPA is for. :)
I am not a financial professional or guru. I'm a schmuck who got lucky 10 times. Such is the life of the trader.
hachiko
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Re: Do I need a CPA, CFP or something else?

Post by hachiko »

First, understand that if you hire someone tht knows enough about insurance to give professional advice on the topic, they're probably going to be a bit weaker in other areas like tax.

Second, forget about the designations unless you need something specific other than just "tax advice."

The (tax) attorney designation is for reviewing and drafting agreements, and for dealing with with tax audits, tax collections, and theoretically court.

The CPA designation is for accounting (which is not the same as "tax" for most individuals), and for dealing with with tax audits, tax collections, and theoretically tax court.

The EA designation is (thought of as) being for people who know IRS processes really well, generally because they worked for the IRS for a certain period of time. They are often VERY VERY helpful when you run into dead ends or are trying to get the IRS to do something that most agents aren't familiar with and need to get it to someone beyond the first couple levels, as well as tax audits, tax collections, and theoretically tax court.

An individual with any of these designations may be able to do what you need them to do tax-wise. As can many professionals without any of these designations. The designation is almost of no import.
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