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How to Choose a Tax Preparer

Posted by David Denkhaus Posted on Jan 30 2014
If you need help preparing your tax return, it’s important to hire a skilled professional. Not only can a professional find all the deductions you are entitled to, he is also less likely to make mistakes that could cost you money later, if your return is audited and found to be inaccurate.

Types of Tax Preparers

The type of paid preparer you choose should be based on your needs. How complex is your tax situation? Do you own rental property? A small business? Are you recently divorced? Just purchased your first house? Based on their expertise and fees, some preparers are better matches for certain taxpayers than others.

* Certified Public Accountants (CPAs)

These professionals must pass a rigorous exam to earn their credentials. Not all CPAs specialize in taxes, but those who do are a good choice for individuals with complex returns, such as small business owners and individuals who need tax advice all year, not just at tax time. If you’re seeking help with other aspects of your personal finances, choosing a CPA who is also a personal financial specialist can be an efficient way to handle all your financial needs.

To find a CPA in your area, or to check the credentials of a CPA you want to hire, visit your state’s board of accountancy Web site or state CPA society Web site.

* Enrolled Agents (EAs)

These agents are licensed by the federal government to prepare tax returns and represent taxpayers before the IRS in case of an audit. EAs have either passed a comprehensive exam or worked at the IRS for a minimum of five years, must complete ongoing professional education and must have passed an IRS background check. Many EAs can help you with more than just tax planning. Some EAs are also CPAs, and some EAs are also certified financial planners and/or accredited tax advisors.

* National Retail Tax Preparation Companies

Pricing for more complex returns can be harder to pin down ahead of time. Many consumer complaints about national tax preparation companies can be found online, and most of the complaints are about tax preparation fees. Customers state that the price they were quoted ahead of time was much lower than the price they were ultimately charged. Of course, the larger a company, the more likely it is to have some unhappy customers. H&R Block states that it prepared in 2009 15.2 million returns at its retail centers.

Also, be aware that when you visit a national chain, you may be pitched additional products, like refund anticipation loans. Whenever you are making a decision about a financial product, it’s a good idea not to make any on-the-spot decisions. The more services a company can sell you, the more money it will make, but you should do your own research to determine if a product is a good fit for you.

Choose Wisely

The right tax preparer for you is out there, no matter what your tax situation. Conduct careful interviews and research, and you may find someone who can make your life easier for years to come.