How to Choose the Right Tax Preparer

Many individuals and businesses choose a tax preparer without conducting the right due diligence. Even though you are hiring a company or individual to prepare your taxes you are still legally responsible for what is actually on the tax return even though it was prepared by someone else. This makes choosing the right tax preparer an important task that should not be overlooked. There are number of questions and considerations to be determined during this process as outlined below.

Avoid Friends or Family

Choosing a tax preparer should not generally include a family member or close friend. Through the process of preparing your taxes this person will have unfettered access to all of your personal financial statements and information. Most people prefer a professional third-party preparer to avoid any conflicts of interest or embarrassing situations with friends or family.

Choosing a Professional

Since the IRS does not officially recognize any company or individual or endorse any for tax preparation it is best to follow these guidelines when choosing a company to suit your needs. The top level professional choice for tax preparation includes a certified public accountant (CPA) although not all CPAs deal with individual tax returns. A CPA can be a great choice for companies looking not only for tax return preparation but also for solid tax advice, as long as the CPA is a tax specialist. Enrolled agents are federally licensed professionals that focus solely on taxes and are allowed to represent clients before the IRS. Lastly the National Association of Tax Professionals provides a list of highly qualified tax preparers.

Ask the Right Questions

If you find a tax preparer near you, you should consider asking all of the questions listed below to ensure they are properly qualified to prepare your tax return.

Are you qualified to prepare my tax return?

This should elicit a response that is specifically targeted to your situation and your tax needs. Generally a professional tax preparer will ask a few questions to determine the depth of tax knowledge you will require. This can vary significantly from a very simple tax return of a retired individual to a sole proprietor small business owner with multiple investments.

Research their history.

Before talking with any prospective tax preparers search out any history they may have with the Better Business Bureau, if they have any disciplinary or license status issues through your state board for public accountants, the state’s bar association and the IRS’s Office of Professional Responsibility if the agent is enrolled.

How much will it cost and how long?

Getting a surprise bill that was unexpected should never happen. Also never decide on a tax preparer that bases their fees only on a percentage of your return or claim much larger refunds then generally possible.

Are they accessible?

Is the tax preparer accessible outside of tax season? They should either have standard office hours throughout the year or have contact information should you have questions after the return is filed.

Follows proper procedure

Professional tax preparers will never ask you to sign a blank tax return before you have had a chance to assess the return. They should also be willing to sign the return themselves as a professional tax preparer including their PTIN as required by law. You should also receive a copy of the return that is filed.

What is their privacy protection?

As the individual or company will have access to all of your personal financial records, understanding their privacy protection standards can put your mind at ease.

Choosing the right tax preparer requires a little bit of research to protect yourself from tax legal liability and can often ensure that your tax return is accurate.

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