When searching for a tax preparer, always ask for their credentials and conduct a background check. If you’ve worked with a tax preparer before, did you inquire about their professional qualifications? Many people neglect to do so, even though tax professionals have access to sensitive personal data like bank accounts, marital status, children, and Social Security numbers.
Here are eight tips to help you find a trusted tax professional or tax preparer near you this tax season.
Tax preparation isn’t a one-size-fits-all service, so it’s important to compare fees and services.
Also, check if the tax preparer offers tax audit support, tax representation, or tax compliance assistance in case of issues.
Tips for Choosing a Tax Professional in Your Area
Request the Preparer’s Tax Identification Number (PTIN)
The IRS mandates that anyone preparing or assisting with federal tax returns for compensation must have a preparer tax identification number (PTIN).
This number ensures that the tax preparer is officially registered and authorized to handle your sensitive financial information. Remember, volunteer tax preparers are not required to have a PTIN, as they aren’t compensated for their services. It’s crucial to understand this distinction and verify that your paid tax professional is following the proper procedures.
Ensure that your income tax preparer includes their PTIN on your return, as the IRS requires this for all paid services. Failing to include a PTIN could result in delays or complications with your tax filing. This PTIN ensures the tax preparer is compliant with IRS regulations and upholds necessary tax standards for proper tax representation. A tax professional with a PTIN can also offer support in case of audits, tax disputes, or any tax compliance issues.
Ensure They Hold a CPA, Law License, or Enrolled Agent Status
How can you find the best tax preparer near you with the credentials that meet your needs?
One option is to search the IRS directory, which lists preparers with PTINs and recognized professional credentials. Volunteer preparers and those with only PTINs won’t be included in this database. This is a good starting point for finding a trusted professional, but be sure to look beyond just the basic PTIN requirement.
A PTIN is a basic requirement that’s relatively simple to obtain, but you should aim higher by choosing a preparer with advanced credentials.
Look for professionals who are certified public accountants (CPAs), licensed attorneys, or enrolled agents (EAs), as they hold specialized expertise. The educational commitment for each designation varies, but these professionals are generally held to rigorous standards in their field. You can also consider tax professionals who have completed the IRS’ Annual Filing Season Program, which includes credentials like Accredited Business Accountant/Advisor (ABA) and Accredited Tax Preparer (ATP).
Leverage Recommendations from Trusted Contacts
Having membership in a professional organization is a strong asset when choosing a tax preparer.
Many professional associations require their members to adhere to strict codes of ethics, professional conduct standards, and provide opportunities for certification. These affiliations ensure tax preparers are up-to-date with tax laws and best practices, offering peace of mind that your taxes are in capable hands.
Professional organizations can also help you find a tax preparer whose skills and background align with your specific needs.
Notable organizations include the American Institute of Certified Public Accountants (AICPA), the National Association of Tax Professionals (NATP), the National LGBT Chamber of Commerce, and the National Society of Black Certified Public Accountants (NSBCPA). Additional groups, such as the National Society of Enrolled Agents (NAEA) and the International Society of Filipinos in Finance and Accounting (ISFFA), offer extensive resources as well.
If you’re already working with a financial advisor, ask whether they offer tax planning or advisory services—many firms can connect you with a reliable tax professional.
Conduct a Thorough Background Check
As tax season approaches, verifying the credentials and work history of your tax preparer might not be at the top of your to-do list.
However, taking this extra step can ensure that your sensitive financial information is protected and handled professionally. A great way to start is by checking your preparer or firm’s reputation with the Better Business Bureau (BBB), which helps assess their trustworthiness and reliability.
You can also go the extra mile by confirming the background of your tax professional based on their specific title.
- For enrolled agents, you can verify their title by emailing the IRS at [email protected].
- For certified public accountants (CPAs), the CPA Verify tool or your state’s board of accountancy can confirm their credentials.
- If you’re working with a tax attorney, reach out to your state’s bar association to ensure they are in good standing. This research ensures you’re working with a legitimate and qualified tax expert.
Evaluate and Compare Pricing for Tax Services
According to a 2023 survey by Drake Software, which gathered insights from over 1,000 U.S. tax preparers, the average cost for preparing a non-itemized Form 1040 in 2024 is projected to be $251. For those filing an itemized Form 1040, the average fee increases to $298. The fee varies depending on the complexity of your tax return and the services needed.
Tax preparers usually charge a base fee, with extra costs based on your return’s complexity or per form. Be cautious of preparers who base fees on your expected refund or promise a larger refund than others. These practices are considered red flags, as a trustworthy tax preparer should not make such guarantees.
Be Wary of Preparers Who Don’t Offer E-Filing
The IRS mandates that any paid tax preparer who handles more than 11 returns for clients must file electronically using the IRS’ e-file system.
If your tax preparer doesn’t offer e-file services, it could indicate they may not be fully engaged in the tax preparation process as you might expect. This could be a red flag that warrants further consideration when choosing a tax professional.
Confirm They Will Sign Your Tax Return
The law mandates that paid tax preparers sign their clients’ returns and provide their PTINs to ensure tax compliance.
Never sign a blank tax return, as it allows fraud, including refund theft. To protect yourself, always review your return before signing.
Assess Whether They Will Stand Behind Their Work
When selecting a tax professional, it’s essential to consider their qualifications and representation capabilities.
Enrolled agents, CPAs, and attorneys with PTINs are authorized to represent you before the IRS for matters like tax audit representation, payment issues, collections, and appeals. However, preparers with only a PTIN cannot represent you in these situations, even if they prepared your tax return. Those who complete the Annual Filing Season Program have limited representation privileges, so it’s important to understand their service scope.
Another factor to keep in mind is availability. The best tax preparers remain accessible even after tax season has ended.
They should be responsive to your calls, emails, or willing to meet in person if necessary. If in-person meetings aren’t important, online tax preparers with live support can provide quick help and ensure tax compliance.
Is Hiring a Tax Preparer Worth It?
If your tax return is relatively simple, using a free tax filing service may be all you need to get the job done. For individuals with straightforward situations, these services offer an easy and quick solution. However, if you have any questions or uncertainties, it’s always good to review the return thoroughly. In these cases, paid packages from tax providers can also offer more comprehensive guidance and features at an affordable price, making them a great option for those who don’t want to visit an in-person professional.
If you run a small business, have a complex tax year, are new to investing, or want in-person help, a tax professional is a smart choice.
Professionals can provide tailored advice, ensuring your taxes are filed accurately and in compliance with the latest tax laws. In such cases, the expertise of a tax preparer can save you time, help you navigate complex situations, and even maximize your potential deductions.
How Do a Tax Attorney and a Tax Preparer Differ?
While both a tax attorney and a tax preparer work in the field of taxation, a tax attorney offers a far more comprehensive and legally-driven approach to managing tax matters. Tax attorneys are highly trained legal professionals who specialize in the intricacies of tax law. They handle complex tax issues, represent clients in disputes or audits, and provide strategic advice to minimize tax liabilities. Unlike tax preparers, tax attorneys manage serious cases like IRS disputes, tax fraud allegations, and legal challenges requiring expert defense. Their ability to provide both legal protection and strategic planning makes them invaluable for anyone facing serious tax issues.
In contrast, a tax preparer can help with routine tasks like filing returns but lacks the legal expertise for complex issues. They focus on processing forms and ensuring correct filings but cannot provide legal counsel or representation in audits or disputes. If you face a serious tax issue, a tax attorney is the better choice, offering more protection, expertise, and legal support. Their ability to offer both legal and financial guidance ensures you’re fully covered in any tax-related scenario.
Conclusion
Choosing the right tax professional ensures accuracy, compliance, and peace of mind. Always verify their credentials, check their PTIN, and confirm their ability to represent you before the IRS. Look for CPAs, enrolled agents, or tax attorneys for specialized expertise, especially if you have complex tax needs. Compare pricing, ensure they offer e-filing, and confirm they will sign your return. If your taxes are simple, self-preparation may work, but professionals can maximize deductions and prevent costly mistakes. Need expert help? Contact a tax professional today and file with confidence!
FAQs
How Can I Spot a Tax Scam When Hiring a Preparer?
Scammers often promise huge refunds, charge fees based on refund size, or refuse to sign returns. Always verify credentials.
What Are the Risks of Using an Unqualified Tax Preparer?
An unqualified preparer can file incorrect returns, cause IRS audits, or even commit fraud under your name.
Can a Tax Preparer Help Me Plan for Next Year’s Taxes?
Yes! Many tax professionals offer year-round tax planning to minimize liabilities and maximize deductions.
What Documents Should I Bring to My Tax Appointment?
Bring W-2s, 1099s, prior returns, receipts for deductions, and any relevant tax-related financial statements.
How Do I Handle a Mistake on My Tax Return After Filing?
If you or your preparer make a mistake, file an amended return (Form 1040-X) as soon as possible.
Users Also Say
Which qualified professional can do your taxes?
Ma***Ri***ti
“In the USA there are ONLY 3 licensed professional that do taxes. Attorneys, CPAs & EAs. Note you do not need to be licensed, have experience, or even know what you are doing to do taxes in the USA. The above 3 professionals are.”
Pa*******es
“Any tax preparer that has a valid TPIN (Tax Preparer Identification Number) that is up to date is qualified to do most tax returns. The TPIN needs to be updated every year and requires the applicant to pass a series of tests. If you need a Schedule for your return to report rentals, a business, or investments, it would be wise to use at least an enrolled agent or one of the franchised tax businesses to be sure you don’t miss some valid deductions. A CPA or tax attorney may even get you a lower tax with their knowledge of deductions such as depreciation.”
Th***Sp***er
“Because of recent changes in the tax code and tax forms, I would argue you don’t need a professional for your personal taxes. If you have one job and you are not cashing out stocks or some other activity that requires advanced knowledge of the law or other tax planning strategies, hiring a professional does not make a lot of sense. Frankly, the tax forms do not change much from year to year, most people could use the previous year’s form as a template. People are often nervous about math and following directions. They fear they will not get a refund unless a professional does their taxes. The reality is our tax code is set up so that most people will get a refund provided they filled out their withholding forms properly. For more sophisticated tax filings such as for a small business or partnership, you definitely need a CPA or someone trained in the IRS tax code and tax law.”
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