Choosing the Right Tax Preparer
So, after years of filing you own taxes, you’ve now realized that it’s no longer worth your effort and time and decided to let someone else do it for you. Probably a great move, but the question now is: who should it be?
Different Kinds of Tax Professionals
Before you hire someone to do your tax return for you, you might want to know first about the different types of tax professionals out there and what they can do for you. Basically, anyone can do tax returns and call themselves tax preparers, but there are four common types of tax professionals that are probably most appropriate for you.
- Certified Public Accountants. A CPA is an individual who has completed specific education, as well as passed qualifying state exams. Most CPAs know how taxes work, but not all of them are experts in the field. So if you want to hire a CPA to prepare your return, you may want to ask first if the professional is experienced in handling taxes. The benefit of hiring an experienced CPA is he or she can help you with other financial concerns, such planning your budget and improving your finances in addition to doing your taxes.
- Enrolled Agent. An Enrolled Agent or EA is a tax professional who has passed a special exam strictly related to taxes. This exam is provided by the IRS, and anyone who passes is given the title as an enrolled agent and considered as someone who is competent with even basic tax preparation. However, it’s also important to know that EAs may specialize in specific tax areas, so it’s also a good thing to ask an EA, who you’re planning to hire, what his or her expertise is. The benefit of hiring an EA is that he or she can help you with your tax needs with lower fees.
- Storefront preparers. These include the tax preparation chains like Jackson Hewitt, Liberty Tax Service, and H&R Block. These offices have all sorts of tax professionals, including CPAs, lawyers, enrolled agents, and even totally uncertified individuals. Using storefront preparer is beneficial if you only have a common or basic tax return.
- Tax attorney. Tax attorneys are lawyers who are specialized in tax laws. But although they’ve completed an advanced degree in taxation, they don’t usually prepare tax returns. Tax attorneys are best at complex legal matters, and you’ll only need them when you are in tax trouble.
Questions to Ask When Hiring a Tax Professional
When looking for a right tax preparer, experience counts. Remember, every individual has specific tax needs, so you would want to find someone who can meet your specific needs. And make sure that the tax professional that you will hire knows the ins and outs of taxes. Keep in mind that the tax industry is constantly changing, so it makes sense to get someone who is knowledgeable, and whose knowledge is always up-to-date. Here are some good questions you can ask to ensure that you find the right candidate.
- What licenses and certificates do you have?
- How long have you been in the tax business?
- What is your experience with my specific tax situation?
- Do you know the requirements of the states and localities where I am required to file?
- What happens if I get audited? Will you represent me?
- What are your fees? How do you determine them?
Don’t be afraid to meet with several prospects and ask for quotes and questions. Taking care of your finances is a big deal, so make sure that you pick the right person who will handle it.