Tips for Choosing 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. While there are many out there who can fulfill this role, not all are created equal.
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 off, be sure to hire a tax preparer who has a Preparer Tax Identification Number or PTIN. It’s also wise to know the various types of tax preparers and know the type of education or certification they should have. Registered tax return preparers, for example, have to take an IRS test and finish 15 hours of continuing education on a yearly basis. They can represent you in the event that you are audited but not otherwise.
In contrast, an enrolled agent can represent you in all kinds of tax matters. Enrolled agents must pass an IRS exam too, on top of completing 72 + hours of ongoing education at three-year intervals. A CPA or tax lawyer follows a different set of certification standards depending on the laws in your state. Lastly, you might want to check whether or not the tax preparer is part of any professional associations or organizations. If anything, membership is a sign that they are dedicated 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. The same type of information can be requested from your state accountancy board and state bar association if you’re working with an accountant or a lawyer. If your plan is to hire an enrolled agent, you should check with the IRS. Of course, there’s word of mouth. Talk to relatives, friends or colleagues who have hired a particular tax preparer to learn more about the quality of service they provide.
Even after finding someone who makes you feel comfortable sharing your financial details with them, don’t make any commitments until you’ve learned about their fees. The IRS advises taxpayers to avoid tax preparers who set their fees as a percentage of your 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. Hiring a tax preparer who is regularly available may be pricier by a bit, but it buys you peace of mind.