Tips for Choosing a Tax Preparer
Understanding the federal tax code can be a humongous task. 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 haven’t hired a tax advisor in the past, finding the right person to trust may require a little research. 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. Also, you should learn about know the different types of tax preparers, along with the educational background and certification you should expect from them. 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 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. Finally, you may want to look into whether or not the tax preparer belongs to any professional organizations. If anything, membership demonstrates the level of commitment they have 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 your plan is to hire an enrolled agent, you should check with the IRS. Of course, there’s word of mouth. Ask friends, relatives or coworkers who have used a certain tax preparer to know more about the quality of their services.
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. 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.