I Moved to a New State—Should I Find a New Accountant?

You've unpacked the boxes, updated your driver's license, and finally figured out where the grocery store is. But as tax season approaches, a nagging question emerges: should you find an accountant in your new state, or stick with the professional who already knows your financial life inside and out?

 

It's a surprisingly common dilemma, and the answer isn't as straightforward as you might think. The good news? In many cases, you don't have to choose between familiarity and local expertise. Let's walk through what actually matters when making this decision.

 

The Case for Keeping Your Current Accountant

Before you start Googling "CPA near me," consider what you'd be giving up by switching. Your current accountant likely has something invaluable: context.

 

They Already Know Your Story

A good accountant doesn't just fill out forms—they understand the arc of your financial life. They know about the rental property you bought in 2019, the stock options you exercised three years ago, and that complicated partnership K-1 that requires special handling. That institutional knowledge has real value.

 

When you switch accountants, you're essentially starting from scratch. Your new professional will need to review years of prior returns, ask dozens of questions you've already answered, and rebuild the understanding that your current accountant developed over time. That transition has costs—both in fees and in the potential for something to slip through the cracks.

 

They're Tracking Your Carryovers

Tax returns aren't standalone documents—they're connected across years through various carryover items that your current accountant is already tracking:

 

Capital losses that exceeded your gains in previous years carry forward until used. Net operating losses from business activities may still be available to offset future income. Passive activity losses from rental properties accumulate until you have passive income or sell the property. Charitable contributions that exceeded your deduction limits carry forward for up to five years. Home office deductions, depreciation schedules, basis calculations—all of these require continuity.

 

When you switch accountants, these carryovers need to be accurately transferred. A new preparer reviewing your prior returns might miss a suspended passive loss from four years ago or overlook remaining capital loss carryforwards. Your current accountant already has this history in their system and applies it automatically.

 

Federal Taxes Are Federal

Here's something many people don't realize: approximately 80% of what goes into your tax return is federal, and federal tax law is the same whether you live in Maine or Arizona. The depreciation on your rental property, the rules for your IRA contributions, the treatment of your capital gains—none of that changes when you cross state lines.

 

Your current accountant's expertise on these federal matters transfers completely to your new situation. The only thing that changes is the state return portion.

 

Remote Work Is Now Common Practice

The pandemic permanently changed how professional services operate. Most accounting firms now work seamlessly with remote clients through secure portals, video calls, and electronic signatures. Many people maintain long-distance relationships with their accountants for years without issue—the documents you upload are the same, the questions you answer are the same, and the technical work gets done regardless of geography.

 

But here's a question worth asking yourself: how do you actually prefer to work with your accountant?

 

Some people are perfectly comfortable with a fully digital relationship—uploading documents to a portal, exchanging emails, and hopping on a video call once a year to review their situation. If that describes you, distance may genuinely not matter.

 

Others value the ability to sit across a desk from their accountant, especially when discussing complex situations or major life changes. There's something different about an in-person conversation when you're working through a business decision, planning for retirement, or dealing with an IRS notice. If you prefer having that option available—even if you don't use it often—a local accountant makes more sense.

 

Be honest with yourself about which camp you fall into. The "it's fine, we can do everything remotely" reasoning works until you're facing a stressful tax situation and realize you'd really rather talk to someone face-to-face.

 

Your Preparer May Not Be Able to File in Your New State

Here's a practical wrinkle many people don't consider: depending on who prepares your taxes and where you're moving, your current preparer may not even be legally permitted to prepare your new state's return.

 

CPAs generally have more flexibility to work across state lines. Most states have mobility or reciprocity provisions that allow CPAs licensed in one state to practice in others, at least for federal returns and basic state filings. However, the rules vary, and some states have specific requirements even for CPAs.

 

Non-CPA preparers face more restrictions. Several states require tax preparers to register or obtain state-specific credentials before preparing returns for that state's residents. Oregon, for example, has its own Board of Tax Practitioners that licenses tax preparers—if your preparer isn't a CPA, enrolled agent, or Oregon-licensed tax preparer, they may not legally be able to prepare your Oregon return. California requires non-CPA preparers to register with the California Tax Education Council (CTEC). New York and Maryland have their own registration requirements as well.

 

Before assuming your current preparer can continue handling your returns, ask them directly: "Are you licensed or registered to prepare returns in my new state?" If the answer is no—or "I'm not sure"—that may make your decision for you.

 

When Your New State Matters More Than You Think

That said, state taxes aren't trivial, and some moves create genuine complexity that favors local expertise.

 

The Part-Year Resident Return

The year you move is almost always the most complicated. You'll likely need to file part-year resident returns in both states, allocating income between them based on when you earned it and where you lived at the time.

 

This gets particularly tricky with certain income types. Stock options exercised after you moved might still be partially taxable in your old state if you earned them while living there. Deferred compensation can create allocation headaches. Business income may need to be sourced based on where customers are located, not where you live.

 

An accountant unfamiliar with either state's rules for part-year residents could easily make costly mistakes—either overpaying by not properly allocating income, or underpaying and triggering notices down the road.

 

State-Specific Credits, Deductions, and Local Nuances

Every state has its own quirks, and knowing them can save—or cost—you real money. This is where out-of-state preparers consistently fall short.

 

Arizona offers a suite of dollar-for-dollar tax credits that can significantly reduce or even eliminate your state tax liability when used strategically. These include credits for contributions to School Tuition Organizations (STOs), Qualifying Charitable Organizations serving the working poor, foster care organizations, and the Military Family Relief Fund. A married couple maximizing all available credits could offset thousands in state taxes annually. An accountant in Ohio or California isn't thinking about these opportunities when they prepare your return—they're focused on getting the Arizona form filled out correctly, not on proactive planning. We regularly see new clients who moved to Arizona years ago and never took advantage of these credits, leaving substantial money on the table each year.

 

Other states have their own nuances that demand local expertise:

 

Retirement income exclusions vary wildly. Illinois exempts all retirement income—pensions, 401(k) distributions, IRA withdrawals—from state tax entirely. Pennsylvania similarly doesn't tax most retirement income. If you're retiring to one of these states, an out-of-state preparer might not realize you don't owe state tax on distributions they've been reporting as taxable for years.

 

Military and first responder benefits differ by state. Many states fully exempt military retirement pay from taxation, but the rules vary significantly. Some states extend similar treatment to law enforcement, firefighter, or other public safety pensions. Kentucky, for instance, excludes government pension income that would be taxable in many other states. Moving from a state that taxes these benefits to one that doesn't—or vice versa—significantly changes your tax picture.

 

California and New York aggressively tax former residents. Both states have complex rules around establishing that you've truly left, and they're known for pursuing people who maintain connections (a vacation home, business interests, or even too many return visits). Escaping their tax reach requires careful planning that an accountant in your new state understands far better than someone still practicing there.

 

Local income taxes create hidden complexity. Ohio has a patchwork of municipal income taxes that vary by city. Maryland counties each have their own income tax rates. These local taxes can add 2-3% on top of state taxes and require separate compliance that out-of-state preparers often overlook or handle incorrectly.

 

Business Complications

If you own a business, moving states amplifies everything. You'll need to consider:

 

Where your business now has "nexus" (a taxable presence) and what filing obligations that creates. Whether you need to register your entity in the new state. How to handle employees who may now be in a different state than your business. Sales tax obligations that may have changed based on your new location.

 

Business owners often benefit most from having an accountant who genuinely understands both states' rules—or at minimum, one who recognizes when to bring in specialized help.

 

The Hybrid Approach: Consultation Without Duplication

Here's what savvy clients sometimes do during the transition: keep one accountant as the primary preparer while consulting with a second for state-specific guidance.

 

This doesn't mean having two preparers each file separate returns—that creates duplicate work, potential inconsistencies, and coordination headaches. Instead, one accountant prepares all your returns (federal and both states), while you consult with a professional in your new state to ensure you're aware of planning opportunities and state-specific rules that your primary preparer might miss.

 

For example, your longtime accountant handles the actual preparation while an Arizona CPA reviews your situation and flags the tax credits you should be taking advantage of, or confirms you've properly established domicile. The Arizona professional provides guidance; your existing accountant implements it.

 

After the transition year, you can evaluate whether to fully switch to a local accountant or continue the arrangement. Many clients find that once they see what a local professional catches that their out-of-state preparer missed, the decision to switch becomes obvious.

 

Questions to Ask Your Current Accountant

Before making any decision, have a candid conversation with your existing accountant:

 

"Are you licensed to practice in my new state?" CPAs are licensed by state, but many accountants hold licenses in multiple states or can easily obtain them. Even without a license, accountants can often prepare returns for states where they're not licensed—they just can't represent you before that state's tax authority if issues arise.

 

"How many clients do you have in my new state?" There's a difference between an accountant who theoretically could handle your new state return and one who regularly does. Experience matters, particularly for states with unusual rules.

 

"What's your comfort level with [specific situation]?" If you have complexities—business income, rental properties, significant investments—ask specifically about how those interact with your new state's rules.

 

"Would you recommend I find someone local?" A good accountant will give you an honest answer. If they're not confident in handling your new state, they'll tell you—and may even have referral relationships with firms in other states.

 

State Complexity Varies Dramatically

Not all state moves are created equal. Your decision should partly depend on where you're going.

 

Moves That Simplify Your Life

If you're moving to a state with no income tax—Florida, Texas, Nevada, Washington, Wyoming, South Dakota, or Alaska—your tax situation just got simpler. Tennessee and New Hampshire tax only interest and dividends (though New Hampshire is phasing this out). Your existing accountant can almost certainly handle this with minimal additional effort.

 

Moves That Add Complexity

California and New York are notoriously complex, with aggressive taxation of former residents who maintain any connections to the state. If you're moving from one of these states, working with someone who understands their specific rules about establishing a new domicile is valuable.

Moving to a state with local income taxes (Ohio's municipal taxes, for instance) adds another layer that benefits from local knowledge.

 

Arizona: More Nuanced Than It Appears

Arizona's flat 2.5% income tax rate looks simple on the surface, but that simplicity is deceptive. The real value in Arizona tax planning isn't in the rate—it's in the credits, elections, and planning opportunities that can reduce or eliminate that liability entirely.

 

Beyond the credits mentioned earlier, Arizona has specific rules around things like the subtraction for certain retirement income, treatment of non-resident income, and conformity (or lack thereof) with federal provisions. The state also has unique considerations for snowbirds and part-year residents around establishing domicile and avoiding dual-state taxation.

 

An out-of-state preparer can certainly fill out Form 140 correctly. But there's a significant difference between compliance and optimization. A local accountant who works with Arizona returns daily will naturally incorporate planning conversations that an out-of-state preparer—focused primarily on your federal return and their home state's rules—simply won't think to raise.

 

Special Situations Worth Considering

 

Remote Workers

If you work remotely for a company in your old state, you may have ongoing tax obligations there. Some states (notably New York and a few others) have "convenience of the employer" rules that tax remote workers as if they're still in the state. Having an accountant who understands these multi-state employment situations is essential.

 

Real Estate Investors

Own rental property in your old state? You'll continue filing a non-resident return there for as long as you own that property. This actually argues for maintaining your existing accountant relationship, since they're already handling those state filings.

 

Retirees

Retirement income gets treated differently across states. Some states fully exempt Social Security and pension income; others tax it fully. If you're moving in retirement, understanding how your new state treats your income sources should factor into your accountant decision.

 

The Bottom Line: Local Knowledge Has Real Value

There's genuine comfort in working with someone who knows your history. But tax preparation isn't just about accurately reporting the past—it's about positioning you for the future. And that forward-looking advice requires deep familiarity with where you live now, not where you used to be.

 

Your old accountant knows your federal situation, and that knowledge doesn't evaporate. But every year you work with someone unfamiliar with your new state's opportunities, you're potentially leaving money on the table. The Arizona credits alone can amount to thousands of dollars annually—savings that compound over time.

 

For the transition year, consulting with a local accountant while your existing preparer handles the returns can make sense, particularly for complex part-year situations. But once you're established in your new state, working with a local professional who understands your complete picture—federal, state, and the planning opportunities specific to where you actually live—typically delivers more value than maintaining a long-distance relationship out of familiarity.

 

The question isn't just "can my old accountant fill out the forms correctly?" It's "who will proactively help me minimize my tax burden in my new home?"

 

Making Your Arizona Transition Count

If you've recently moved to Arizona—or you're planning a move soon—now is the time to establish a relationship with an accountant who knows this state inside and out. The year you move is typically the most complex from a tax perspective, but it's also your first opportunity to take advantage of Arizona's unique tax benefits.

 

We work with new Arizona residents every year, helping them navigate the part-year transition while setting up the planning strategies that will benefit them going forward. From maximizing your STO and QCO credits to ensuring you've properly established Arizona domicile, we'll make sure you're not just compliant—you're optimized.

 

Your old accountant served you well. But you live in Arizona now, and you deserve an accountant who thinks about Arizona tax planning as naturally as breathing.

 

Visit www.desertrosetax.com to schedule a consultation, or call us at (520) 747-4964. Let's make sure your move to Arizona works for you at tax time, too.

 

Edward Ethington, CPA, CFP®, MBA
Desert Rose Tax & Accounting
Your Arizona Tax Experts
(520) 747-4964
www.desertrosetax.com

This blog provides general information about multi-state tax considerations and should not be construed as personal tax advice. Tax laws vary by state and change frequently. Please consult with a qualified tax professional at Desert Rose Tax & Accounting for guidance specific to your situation.