How to Choose a Tax Preparer

Do you want a responsible tax professional who will do your taxes correctly and efficiently?  Listed below are action steps and types of qualified tax preparers worth considering as you search for help with taxes.

Know your tax preparer is trustworthy because even though they prepare your tax return, you’re still legally responsible for the contents.  You can research a preparer’s trustworthiness by following the next couple of steps.

Make sure they have the right qualifications; for example, a tax preparer can be an Enrolled Agent, Accredited Tax Preparer, Certified Public Accountant, or attorney. In California, you’ll find California Registered Tax Preparers; other states may require a license or a permit to prepare tax returns for a fee.

Check the preparer’s history for updated licenses, disciplinary action, etc. You can contact your state’s Department of Revenue for certain qualifications for preparers. For Certified Public Accountants, check with the state boards of accountancy.  You can also check preparers’ history through the Better Business Bureau.

Before you hire a preparer, ask about fees. Stay away from preparers who base fees on a percentage of your refund.

Shy away from preparers who state they can get you a bigger refund than other preparers.

See if they can e-file your return. Tax preparers who file returns for more than ten clients must e-file returns unless the client requests a paper return.

Make sure they’re accessible even after the due date in case there are questions concerning your tax return even years from now.

Note their requests for information because reputable preparers will need information like total income, qualifications for deductions, records, and receipts.  Be wary of preparers offering to e-file your return based on your last pay stub before you receive your Form W-2: it is against IRS e-file rules.

Never sign a blank return.

Review your entire return before you sign so you ensure that it is correct.  And don’t be afraid to ask questions until you understand everything.

Make sure that they use a PTIN, which a paid preparer must include when signing the return.  It’s the law. They must also provide you with a copy of the return.

Tell the IRS about abusive tax preparers and suspected tax fraud by filing a report with Form 14157, Complaint: Tax Return Preparer. If you think your tax preparer filed or altered a return without your consent, use Form 14157-A, Return Preparer Fraud or Misconduct Affidavit.

Before you choose a tax preparer, ask yourself some questions:

1. What kind of service do you need?
2. Do you simply want someone to complete your tax return now?
3. Do you want someone to act as an adviser all year round?
4. Is it important to have the same person prepare your taxes every year?
5. What can you afford to pay?
6. Do you have difficult issues that you need to resolve?
7. Do you need someone to appear before the IRS on your behalf (audit representation, payment negotiation, etc.)?

Types of Tax Preparers

Tax Clinics

Various organizations offer tax assistance for elderly or low-income taxpayers. The big plus of a clinic is that the fee is usually zero or quite low.

Local Tax Services

These include individuals and small companies. Local tax services are usually open full-time during tax season and by appointment the rest of the year. They are usually legitimate and competent and may be required to be bonded. With individual services, you are likely to have the same preparer from year to year.

National Chains

National chains or other commercial services offer convenience. During tax time, their offices are open nights and weekends. They offer walk-in service on a first-come-first-served basis, and their staff is required to undergo some instruction and training before being hired. These tax preparers range from beginners to very experienced and usually do tax work only seasonally; however, they usually have an area office that is open year-round. Plus, if you move and lose track of a previous return, they can usually access that for you through their national database. A national chain is good for a routine tax return, but if your return is complicated or for a business, you may want to be sure of your preparer’s qualifications. The IRS monitors these commercial tax preparers to make sure they comply with tax regulations.

Enrolled Agents

An Enrolled Agent (EA) is a federally authorized tax practitioner who passed a comprehensive IRS exam and has technical expertise in the field of taxation. EAs prepare tax returns, and they advise and represent individuals, trusts, estates, partnerships, corporations, and any entities with tax-reporting requirements. They may also provide bookkeeping services for business clients. Find an enrolled agent at taxexperts.naea.org or irs.treasury.gov/rpo/rpo.jsf.

Certified Public Accountants

A Certified Public Accountant has a college degree and has passed a state professional qualifying exam. Not all CPAs are tax experts, so before you employ a CPA, look for one who has experience with handling tax matters and stays up to date on tax laws. You can find one on your state accountancy board’s website.

Tax Attorneys

A tax attorney usually negotiates tax issues but can also prepare returns. Tax attorneys advise clients on tax and financial planning, and they may be well-informed on tax laws and their applications. You might consider a tax attorney if you wish to shelter part of your income or have a complicated dispute, as they specialize in handling tax disputes and can go to tax court.

Want to make taxes easier? Whether you have a question about taxes or want to know how to find a qualified tax preparer, talk to a Money Coach today! Our team of coaches includes Tax Specialists with multiple accreditations and designations, and they are well-equipped to help. Call us today at 888-724-2326.

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Information provided in this article is for informational purposes only and is not intended to offer specific personalized investment, financial planning, tax, legal, or accounting advice. We recommend that you consult an attorney, tax advisor, or accountant regarding your unique circumstances.