How to choose a tax preparer

Tax season is right around the corner so we wanted to show you how to choose a tax preparer.

About 75% of people who use a tax preparer never asked about the preparer’s credentials or have asked if the preparer would help them in a tax audit.

Knowing you will be sharing information about your income, your bank accounts, your family and your Social Security number.

Meaning you NEED to ask for credentials and if they will support you in an audit.

Here are a few Types of Income Tax Preparers:
Enrolled Agent (EA)
Accredited Tax Preparer
Certified Public Accountants (CPA)
Public Accountants
Tax Attorneys

HOW TO CHOOSE A TAX PREPARER

1. Ask for Preparer Tax Identification Number

The IRS requires anyone who prepares federal tax returns for compensation to have a PTIN. Make sure your income tax preparer puts his or her PTIN number on your return, the IRS requires that.

2. Require A Certified CPA, Lawyer or Enrolled Agent 

A PTIN is relatively easy to get, so go a step further and get a credentialed preparer.

Someone who’s also a certified public accountant, licensed attorney, enrolled agent. These credentials all require varying amounts of study, exams and ongoing education.

3. Find a Preparer With Clients Like You

When you choose a tax preparer, you want one with clients who are similar to you. That way, you’re more likely to get the best service for your needs. 

4. Ask For The Right Qualifications

Tax preparers have different levels of training and skills, so you want to choose one that has all the qualifications possible so you  get your money's worth.

While a non-CPA accountant might technically be qualified to prepare your return, it often pays to hire an actual CPA or an enrolled agent (a federally licensed tax practitioner).

Both CPAs and enrolled agents are authorized to represent clients in IRS matters, so if the need arises, that's some nice protection to have.

5. Know Your Fees Beforehand

When learning how to choose a tax preparar, the bad news is you will have to pay them to file your taxes.

The amount you're charged will generally depend on how complicated your taxes are and how many unique tax forms the preparer you hire will need to prepare.

To make it easier for you, you want to look for a flat fee structure over a hourly rate since you really dont know what the final cost will be.

6. Make Sure They E-File

The IRS requires any paid preparer who does more than 10 returns for clients to file electronically via the IRS’ e-file system.

If your tax preparer doesn’t offer e-file, it may be a sign the person isn’t doing as much tax prep as you thought.

7. Will They Sign Your Returns

The law requires paid preparers to sign their clients’ returns and provide their PTINs.

Never sign a blank tax return, the preparer could put anything on the return, including their own bank account number so they can steal your refund.

To protect yourself, make sure all paperwork is signed by your preparer BEFORE you signe anything.

That's our 7 steps on how to choose a tax preparer, we hope it helps you find the best professional to handle your taxes.