It’s tax time again and you need someone to prepare your tax return! You may google “tax preparation services” but when a list of 10 different names pop up, how are you supposed to know who to choose?
It’s not an easy task finding a preparer who you can trust to accurately and efficiently prepare and file your tax return, but it’s certainly an important one!
Maybe you decide to take a chance and schedule a meeting with one of the 10 preparers you found on Google but once you meet them, how can you be sure that he or she is the right preparer for you? Ask them the following questions, and pay close attention to their answers:
1. Do you have a PTIN (Preparer Tax Identification Number)?
Anyone who prepares federal tax returns for compensation must have a valid PTIN before preparing returns. Without this identification number a tax preparer is not allowed to file your tax return. This should be the first item you check when interviewing a tax preparer!
2. What is your tax background?
Is your new tax preparer a Certified Public Accountant (CPA), an Enrolled Agent (EA), or do they not have any formal credentials at all? Ask about what they do and why they’re qualified to do it. You may also want to find out how long they’ve been preparing tax returns. If you’ve got a complicated tax situation it may not be the right year to choose the preparer whose just getting started in the tax preparation industry.
3. Do you know how to file this tax return?
Not every preparer will have experience filing every type of tax return. One preparer may only file 1040s and another might be an expert at filing corporate tax returns. Ensure they have experience filing the types of returns you need to file before choosing them. You don’t want to be a new preparer’s tax return guinea pig!
4. Do you know the filing requirements of the states where I will need to file?
Not all state tax returns are created equal. While your preparer may be experienced in filing state tax returns for the state they are located in, they may be unsure of the requirements necessary in the remaining 49. If you’ve moved states in the last year or work in a different state than you live, ensure that your tax preparer knows how to handle your specific tax situation.
5. Do you have qualified support staff?
Some tax preparers choose to work on their own while others have a full team of qualified professionals behind them. By choosing the tax preparer with competent support staff you’ll be sure that someone is always available to take your call and answer your questions even if your tax preparer is busy working on tax returns. It will ensure that your return will get prepared and finalized quickly as your preparer will be able to focus on your return. It will also be likely that you will find someone capable of handling any other accounting needs you have, such as bookkeeping or IRS representation, within that tax preparer’s accounting firm.
6. Can I file electronically?
Filing electronically is the way to go! Not only is it the fastest way to get your refund and typically results in fewer math errors, but it may also be required: a paid preparer who prepares and files more than ten tax returns must file returns electronically unless the client opts out. Ensure your new tax preparer is going to be filing your return electronically before selecting them!
7. How do you determine your fees?
Fees will typically be based on the complexity and time required to file your tax return. However, be wary of preparers who base their fee on a percentage of your anticipated refund, as they will have an incentive to encourage inappropriate credits and deductions – not to mention, this pricing structure is illegal! Similarly, by law a tax preparer cannot base their preparation fees based on how much they need.
8. When will I receive a copy of my tax return?
Your paid preparer is required to provide you with a copy of your own tax return which you must retain for your own records. If a preparer is hesitant to let you know when you’ll receive a copy of your return, it may be time to search for a new preparer.
9. Are you available year-round?
Filing taxes can sometimes be seen as a seasonal profession and many preparers decide to disappear once the filing season is over. However, you may find you have additional questions or receive a notice from the IRS later in the year. You’ll want to be sure your preparer is reliable and will be able to provide you with accounting services year-round.
10. What happens if I get audited?
You might not want to think about getting audited, but it can happen. Will your preparer handle the audit with the IRS on your behalf? Or will you need to fend for yourself? Make sure they are qualified to represent you before the IRS before choosing them.
Don’t be hesitant to ask your preparer these, or any other, questions. Finding the best tax preparer for you will require some time and effort, but it will be worth it once you build a trusting and long-term relationship with.
If you’re looking for a tax preparer this year and would like to hear our answers to the questions above, please email us today.