How To Hire The Right Tax Prep Pro to Do Your Income Tax Return
Hint: Hunt for one whose training and experience match your tax situation
Haven’t yet filed your tax return because you dread the task and don’t know who to hire to do it for you?
Here’s how to decide if you need a Certified Public Accountant, Enrolled Agent or other type of paid preparer — and how to find one who’s competent and trustworthy.
Find the right fit
CPAs must pass the Uniform CPA Examination and meet their state’s Board of Accountancy’s education and experience requirements to obtain and retain their licenses.
IRS-licensed EAs must pass a rigorous, three-part exam and take 72 hours of IRS-approved continuing education courses every three years. EAs generally focus on taxes, while a CPA might also audit your small business or provide personal financial planning advice.
CPAs, EAs and attorneys may represent their clients before the IRS on any matter, including audits, payment issues and appeals, regardless of whether they prepared the tax return in question.
You can search for CPAs in your area on the American Institute of Certified Public Accountants’ (AICPA) website. You can find local EAs on the National Association of Enrolled Agents’ website.
If you’re a wage slave who takes no or few itemized deductions, however, you probably don’t need a CPA or EA to fill out your Form 1040 and Schedule A. Most storefront tax preparers aren’t CPAs or EAs, although some tax prep chains employ some to serve clients who have more complex returns.
In that case you might look for a preparer who participates in the IRS’s Annual Filing Season Program. These folks have completed 18 hours of continuing education to prepare for the current tax year. This credential allows them to represent their taxpayer clients before IRS revenue agents.
Do a background check
Make sure that any candidate for your job has the expertise he or she advertises.
Anyone who prepares tax returns for pay must obtain a Preparer Tax Identification Number (PTIN) from the IRS and renew it annually. (While any preparer you hire should have a PTIN, it doesn’t signify any qualifications.) The IRS maintains a directory of PTIN holders, and you can search by zip code for people with various credentials, including CPA, EA and Annual Filing Season Program participants.
Run from these red flags
Don’t do business with a tax preparer who won’t give you an estimate for preparing and filing your return electronically or who offers to take a percentage of your tax refund as his fee. The average charge for completing a 1040, Schedule A and state tax return for 2014 was $273, according to the most recent survey by the National Society of Accountants. Expect to pay more if your return includes additional forms and schedules.
Also avoid tax preparers who won’t give you an address or telephone number where you can reach them after you’ve filed your return. If the IRS has questions, you’ll want to be able to quickly contact your preparer.
Finally, stay away from preparers who claim they can get you a larger refund than others or who push you to stretch the truth to trim your tax bill. Remember: You’re legally responsible for the information on your tax return, even if someone else prepares it for you.
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