Switching Accountants Without Losing Anything

People stay with the wrong accountant for years. Not out of loyalty exactly, but because leaving feels like it might break something, and the thing you would break is invisible until you need it.

The list of what you actually need is shorter than the anxiety suggests. Here it is.

#Collect these before you say anything

Get your documents while the relationship is normal. Not because anyone is likely to behave badly, but because requests get slower after a resignation letter, and you do not want to be chasing a schedule in March.

Three years of filed returns, federal and state, complete with all schedules and attachments. Not summaries. The full filed copies.

Depreciation schedules. The single most important item and the one people forget. This lists every asset, its original cost, the method used, what has been depreciated so far and what remains. Without it, your new preparer cannot correctly continue depreciation or calculate gain when you sell an asset. Reconstructing it from old returns is possible and tedious; reconstructing it without them is genuinely difficult.

Carryforwards. Net operating losses, capital loss carryforwards, passive activity losses, basis schedules, unused credits. These are amounts that travel from year to year, and they are easy to lose in a transition. Losing a carryforward means paying tax you did not owe.

Entity and election documents. Formation filings, EIN letter, S-corp election acceptance letter, any other elections made. Small files, expensive to replace.

Payroll records if they handled payroll, including the filings and year-end forms.

Your own source records. Bank statements, receipts, and the books themselves. These are yours in the first place.

#What belongs to whom

A useful distinction that prevents most disputes.

Always yours: the records you provided. Your bank statements, receipts, invoices, and your own books. Nobody can withhold your own documents from you.

Yours, and normally provided: copies of returns that were filed on your behalf.

Grey area: the preparer’s internal workpapers. Professional practice varies, and a firm may have its own policy about internal analysis.

If a fee genuinely is outstanding, pay it. Arguing over a modest invoice while trying to extract records is a bad trade, and a clean exit is worth more than winning that argument.

#Timing the switch

The switch itself is easy. The timing is where people create problems.

Best windows: after a filing season closes and before the next one begins, or right after an extended return is filed. A quiet period gives the new preparer time to actually read your history rather than triaging it.

Worst window: February and March. Every preparer is at capacity, onboarding is rushed, and a rushed onboarding is exactly when a carryforward or a depreciation schedule gets missed.

Do not let a deadline fall into the gap. The specific risks:

• An extension that nobody files because each party assumed the other was handling it
• An estimated payment that gets skipped in the transition
• Payroll filings with their own deadlines, if the old firm was running payroll

Be explicit about who is responsible for what, and through which date. Get it in writing, even briefly.

#What to ask a new preparer

Since you are choosing anyway, choose deliberately.

Who actually does the work, and who reviews it? Reasonable answers exist at every firm size. You just want to know.

What is their credential? A CPA, an Enrolled Agent or an attorney has unlimited representation rights before the IRS, which matters if something goes wrong. Ask directly.

How do they communicate during the year? If you only want a return prepared, say so. If you want someone reachable in July when you are making a decision, confirm they work that way rather than assuming.

How is pricing structured, and what is included? Specifically: is a notice response included, or billed separately?

Will they review prior years? A good onboarding includes at least a look at the last couple of returns, which is how errors and missed opportunities surface.

#About amending prior returns

A new preparer will sometimes find something in an old return. Two cautions, in both directions.

Different is not always wrong. Many positions are judgment calls, and a preparer who declares everything before them incompetent is displaying a sales technique, not a finding. Ask what specifically is wrong and what the authority is.

Genuinely wrong is worth fixing. A missed deduction is money. A misstated position is exposure. There are time limits on claiming a refund, so a real error is worth acting on rather than sitting on.

If you are unsure, a second opinion on a specific return is a small, bounded piece of work, and much cheaper than either amending unnecessarily or leaving a real problem in place.

#If you are behind as well as switching

Common, and worth naming: many people change preparers precisely because years went unfiled.

Do not try to hide that during onboarding. Unfiled years have a defined process, and the order you file them in matters for penalty relief. A preparer who knows the full picture on day one can sequence it properly. One who discovers it in March cannot.

#The short version

Collect three years of returns, the depreciation schedules, the carryforwards and your entity documents before you announce anything. Your own records are always yours. Switch during a quiet period, and make sure no extension or estimated payment falls into the handover gap.

Then ask the new firm the questions above, and expect them to look at your prior years rather than starting from a blank page.

If you are considering a change and are not sure what you are currently missing, the document list above is a good self-audit. If you cannot produce the depreciation schedule, start there.