Find a Tax Preparer that is right for you

Posted by Bruce Mc on Dec 17, 2008 in Choosing a preparer, Opinions | 1 comment

When opening your mail in January and February, you probably will receive a lot of documents with descriptions and/or warnings about this information being “Important Income Tax Information!” Soon you will have to decide how to deal with last year’s income tax situation.
            So, do you try to prepare and file your own income tax returns, or are you thinking about hiring a tax professional?

If you are thinking about hiring a tax professional ask yourself “why would or do I need a tax preparer”.  If you feel that you need a preparer there are four basic needs for tax preparation services:

1.      speed,

2.      accuracy,

3.      creating a customized tax strategy, and

4.      managing a complex tax situation with accuracy and professionalism.

Everyone wants their tax returns to be accurate. All tax professionals, even those at national franchises, should guarantee the accuracy of their work.

If you have a particularly complicated tax situation, you should seek a tax professional with substantial experience to help you. 

If having your taxes done quickly is most important, you’ll probably go to one of the nationwide tax franchises. Although I don’t recommend this, the employees at these companies are trained to get your taxes done quickly. Every year I hear from new clients and non-clients who are/were dissatisfied at the level of accuracy and professionalism encountered there.

Tax laws can be complicated and usually change from year to year, so it’s important to find a preparer who has the knowledge and experience to prepare your returns correctly. A lot of states do not require tax preparers to be licensed; however, many preparers are licensed, certified, and belong to professional organizations that require a certain level of education. Find one of those.

Also, services vary considerably from preparer to preparer, so you’ll also want to find one who offers the services you need.

Before you hire a preparer, call around to a couple of tax offices and take the time to ask these questions:

What kind of formal tax training do you have?

Do you hold any professional licenses or designations, such as certified public accountant (CPA)?

Do you belong to any professional organizations?

Do you take continuing professional education classes each year?

How long have you been preparing tax returns?

Have you ever done a tax return dealing with my situation?

Are you open for business year-round?

Have you ever been disciplined by any government authority for malpractice?

Are you authorized to and will you represent me in an audit or collection matter with the IRS or state  Department of Revenue if necessary?

How much do you charge, and how do you calculate your fees?

Ask what their price range is. Prices for tax preparation will vary depending on how complex your tax return is. Some professionals charge by the hour, or by how many tax forms you need to fill out, or even a flat fee for all work.

Ask about any guarantees the tax preparer offers. The tax preparer should be willing to guarantee the accuracy of the returns, be willing to amend the tax return if there was a mistake in the tax prep, and be willing and able to assist you in an IRS audit.  

Also, be careful of tax preparers who claim to know “the secrets” of obtaining unusually large refunds. Most preparers charge rates based on their time or the complexity of your return, and you should avoid anyone whose fees are based on a percentage of your refund. (This practice is illegal.) Incase questions arise after your return has been filed, find out if, and where, your tax preparer can be contacted in future weeks or months.

Never sign a blank tax form for any preparer.

Remember that you are ultimately responsible for your tax return, so be sure to choose your tax preparer carefully. If you want to find competent, licensed tax professional I suggest you visit The IRS web site Authorized IRS e-file Providers for Individuals then/or go to Search the NATP Member Directory, then call around and ask questions.

Friends and family can be of additional assistance.

What You’ll Need:

◊  All your current year tax documents

◊  Photo identification

◊  Social Security cards for yourself and your dependents

◊  Checkbook for direct deposit of your refund/direct debit for any amount due

◊  Copy of last year’s tax return

Tip: Little known fact is that local CPAs and EAs and other Tax professionals charge only slightly more than a franchise service and will provide much more personalized service.

Tip: Be sure to ask if your preparer is an enrolled agent (EA), CPA, or has received advanced tax training.

Tip: All tax professionals specialize. Find a CPA or EA who has the experience, knowledge, and skills you are looking for.

Tip: Some franchises will try to sell you an enhanced guarantee to cover additional taxes and penalties in case of an audit. This is practically a guaranteed profit for the franchise.

Some more Tips:

¤  A CPA is a professional accountant licensed by the state. Best for corporate accounting, tax audits, and business consulting.

¤  An Enrolled Agent is a tax professional licensed by the IRS. Best for complex tax issues, tax audits, and responding to tax collectors.

¤  A Tax Preparer may be registered by the state. Best for straightforward tax returns.

¤ The national Tax Franchises are H&R Block, Jackson Hewitt, and Liberty Tax. With offices nationwide. Often fast, courteous, and convenient. But some employees will be less trained than others. Be sure to ask for a senior-level tax preparer.

Expect to pay from $150 to $450, depending on how complicated your tax return is.