Author Topic: New Jersey Mustachian-Friendly Accountant  (Read 427 times)

cool7hand

  • Pencil Stache
  • ****
  • Posts: 605
New Jersey Mustachian-Friendly Accountant
« on: November 09, 2020, 06:43:37 AM »
My wife and I are looking to change accountants and we currently live in NJ. Our current accountant handled my former business's taxes. We stuck with this individual because I'm still receiving distributions and it's just easier given that this individual knows all the numbers. The distributions cease by the end of 2020.

So, we're looking to change accountants in either 2021 or 22. And we're looking for someone who is Mustachian friendly. For example, my current accountant had no idea what I was talking about when I raised interest in a Roth Conversion Ladder. I know that we could do this all ourselves, but given our savings and comfort level, we'd prefer running our plans by a professional.

Thanks!

cool7hand

  • Pencil Stache
  • ****
  • Posts: 605
Re: New Jersey Mustachian-Friendly Accountant
« Reply #1 on: November 12, 2020, 08:04:51 AM »
Do other Mustachians in NJ not use an accountant? Are we the outlier?

yachi

  • Pencil Stache
  • ****
  • Posts: 806
Re: New Jersey Mustachian-Friendly Accountant
« Reply #2 on: November 12, 2020, 08:27:36 AM »
What are you looking for this person to do?  Fill out yearly taxes based on information you provide?  Handle your personal expenses like accounts receivable/payable like I imagine a multiple home owning movie star has?

I'm not in NJ, but PA.  I had a tax person years ago.  The cost became crazy.  I think $300 to fill out taxes.  The difficulty was it was never hands-off for me.  I had to clarify that I only withdrew contributions to our Roth IRA's for a house downpayment, so the 5-year requirement didn't apply.  First we'd meet, they mentioned needing something showing cost basis that I didn't have.  I'd need to look up the information and get it to them.  Also, I needed to know things like: what's deductible for rental real estate so that I could keep the paperwork for tax time, what investments should I make in taxable accounts vs retirement accounts.

What I do now is I use free tax software the prompt the questions, and I navigate to the brokerage accounts.  I save tons of money vs paying someone.  You could argue I'm more likely to make a mistake, but it's unlikely to cost me more than what I've saved by doing it this way.

cool7hand

  • Pencil Stache
  • ****
  • Posts: 605
Re: New Jersey Mustachian-Friendly Accountant
« Reply #3 on: November 12, 2020, 08:37:27 AM »
Yachi, great question. It got me thinking.

The answer is that the primary reasons for an accountant are (1) to work with a MMM-friendly professional with more knowledge than us so that we can maximize tax efficiencies; and (2) to act as a buffer between us and Uncle Sam should our unusual lifestyle result in attention. Given our net worth, risk tolerance, and goals, we'd happily pay $300. Perhaps more. If after a couple of years we don't think the accountant is paying for her- or himself, we'd just do the job ourselves.

Thoughts?

yachi

  • Pencil Stache
  • ****
  • Posts: 806
Re: New Jersey Mustachian-Friendly Accountant
« Reply #4 on: November 12, 2020, 09:35:24 AM »
I think the tax strategies we discuss all the time are fairly advanced, with limited application to people not planning on FIRE.  There are other tax strategies that may would be less applicable to us, like converting to Roth IRAs to limit Required Minimum Distributions.  I think finding an accountant with MMM-knowledge might be harder than teaching an accountant MMM knowledge.

So my suggestion would be figure out what techniques you want/need to use: Roth ladder, keeping income low for healthcare subsidies (but high to not get medicaid), and sharing links to them with your accountant/tax person.  I think most should be capable of figuring things out from there/sharing opinions on pittfalls.