Those are various tax professionals out there who can offer you help. But picking the suitable type of tax preparer is the easy side of it. Finding the right person for the job is the challenge.
If you’re planning to enlist the help of a professional tax preparer for the first time, or you want a new tax preparer because you’re not happy with your current preparer, these five steps will guide you:
1. Get referrals.
Ask people around you – relatives, friends, colleagues, etc. – if they can recommend a good tax preparer. If you are new in the area, your state’s CPA society can provide some leads, along with the Accreditation Council’s website, and of course, the enrolled agent search tool of the National Association of Enrolled Agents.
2. Talk to prospective agents.
No matter how busy they are, tax preparers should have time for 20- to 30-minute phone interview. If they can’t give you that, or if they will charge you for the initial interview, find someone else.
During the interview, you should be able to cover the following:
Experience
You’ll want a tax preparer who has been in the business long enough to be able to handle IRS challenges and other potential problems.
Credentials
Find someone who is an Enrolled Agent, an Accredited Tax Adviser, Accredited Tax Preparer or a Certified Public Accountant. And take note that only CPAs can have the Personal Financial Specialist, designation. Approach your state’s licensing board and professional associations to find out whether the candidate has a license, is a member of good standing, and has not been involved in a disciplinary case.
Specialty
If you have a specific need, this can be a crucial point. If you’re a small business owner, for example, you need a tax preparer who knows business accounting. Or if you’re renting out some properties, find someone with experience handing such a tax situation.
Fees
Ask the tax preparer if they will charge a fixed or hourly rate and whether this will be enough for all services, or if there will be add-ons, such as for planning meetings throughout the year.
Single Practitioner vs. Firm
If the preparer you’re considering is part of a firm, ask whether they will double-check your returns once the associate has completed them.
IRS Representation
Ask your prospective tax preparer if they will handle IRS issues. If not, forget it. You definitely will want someone who will defend your case.
3. Look out for red flags.
Avoid anyone who plans to cheat the IRS. And finally, don’t hire them if they want a percentage of your refund as payment. Reputable tax preparers are always paid a fixed or per-hour fee, period.
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