How to Choose a Tax Preparer
Understanding the federal tax code can be a humongous task. For many Americans, paying a professional tax preparer often makes things easier for them. Then again, picking the right one can be challenging on its own. Though there could be tons of options out there, they’re hardly the same.
If you’ve never worked with a tax advisor before, finding a person you can trust completely may require a bit of homework on your part. Below are tips to help you in your search:The following are pointers that can guide you as your search:Here are tips to get you started:
First and foremost, hire a tax preparer with a Preparer Tax Identification Number or PTIN. You should know the different types of tax preparers as well, including the type of education or certification they are expected to have. For example, registered tax return professionals should pass an IRS exam as well as complete 15 hours of continuing coursework year after year. They will be able to represent you in an audit but not in any other situation.
In contrast, an enrolled agent can represent you in all kinds of tax matters. Enrolled agents should also pass an IRS exam and finish no less than 72 hours of continuing education with three-year intervals. A CPA or tax attorney will be bound by different certification standards as per your state’s law. Lastly, you might want to check whether or not the tax preparer is part of any professional associations or organizations. If anything, membership tells you they are committed to their profession.
The IRS advises contacting the Better Business Bureau to know if your prospective tax preparer has any complaints to their name. In addition, see if they’ve been subject to any disciplinary actions before and if their license is active. Similarly, your state bar association and state accountancy board will be able to give you this kind of information for attorneys and accountants. If you intend to hire an enrolled agent, contact the IRS. Of course, word of mouth is always invaluable. Talk to people around you – friends and relatives, coworkers, maybe even neighbors – who might be able to give you a better picture of a certain tax preparer’s services.
Even if you think you’ve found someone who makes you feel at ease discussing your financial information with them, don’t commit until they have told you about their fees. As well, the IRS advises taxpayers to stay away from tax preparers whose fees are calculated as a percentage of the taxpayer’s expected refund.
Finally, as most taxpayers know, tax prep providers begin to pop up everywhere as soon as tax season gets underway. Some are affiliated with reputable companies, but others magically disappear as the tax season closes, which can be a problem when you have questions or need to amend your return eventually. A tax preparer who is constantly around may be a bit more expensive, but they will be healthy for your peace of mind.