Tips for Choosing a Tax Preparer
Knowing the federal tax code can be a feat. For a lot of Americans, it’s easier to pay a professional tax preparer to keep things simple 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 instance, registered tax return preparers must pass an IRS exam and take 15 hours of ongoing coursework each year. During an audit is the only time a registered tax return preparer can represent you.
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, find out whether your prospective tax preparer is a member of any professional organizations. If anything, membership tells you they are committed to their profession.
The IRS recommends you check with the Better Business Bureau for any complaints under the name of your prospective tax preparer. As well, check if they have been subject to any type of disciplinary action in the past, and if their license is valid. 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’re thinking of hiring an enrolled agent, you’ll have to contact the IRS. Of course, word of mouth is always invaluable. Ask friends, relatives or coworkers who have used a certain tax preparer to know more about the quality of their services.
Even after finding a tax preparer with whom you are very comfortable sharing your financial details with, refrain from making commitments until you’re sure about their charges. 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.
Lastly, as most taxpayers have seen, tax preparers start popping up everywhere once tax season sets in. 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 always available may cost you a bit more, but it’s good for your peace of mind.