How to Choose a Tax Preparer: Everything You Need to Know


In 2020, the IRS stated that some $1.5 billion in unclaimed refunds were left in Federal coffers. So, making sure that your taxes are filed on time and accurately is essential not only to fund our shared government but to make sure that you get all the money owed to you and your family.

First, to choose a tax preparer, you need to understand that there are several different outlets to choose from. You can go it alone with minimum checks, or you can go as far as to retain a tax law professional to avoid legal issues.

However, most people look for a qualified and capable tax professional to ascertain their tax debt or refund. These professionals are skilled at ensuring you get the correct number of deductions and are not leaving money on the table.

In the following article, we’ll discuss options for tax preparers and what you need to know for comparing tax preparation services.

Types of Tax Preparers

Credentialed tax preparers include licensed attorneys, certified public accountants, and enrolled agents.

The tax attorney is the most expensive, and you usually turn to these lawyers when you need to shelter some income, have a significant legal issue, or need estate planning. However, if you are worried about tens of thousands of penalties from the IRS, you might want to consider hiring an attorney.

CPAs have a degree in accounting and have passed a licensing exam. A CPA may serve you well if your return is complex and has potential legal ramifications.

Non-credentialed tax preparers are tax professionals that work seasonally or part-time to file returns to the federal government. These preparers are certified to make these filings for private individuals and have their own certified tac ID number.

These tax preparers are usually thoroughly competent but realize that some of these preparers are self-taught. Therefore, you should always check the qualifications and experience of these preparers.

Preparer’s History

When working with an attorney or CPS, it is easy to check if their licensure is up to date and ask for references. You can do the same with non-credentialed tax preparers.

You should also ask the preparer their qualifications when they last trained on this year’s filing requirements and if they have tax preparation experience for situations similar to yours.

(Find out more on tax returns here.)

Service Fees

You should avoid tax preparers who want a percentage of your refund or offer refund anticipation loans. Typical tax preparers work off a flat fee with possible add ons for special services. But, of course, tax attorneys have the highest prices and may work on retainer.

The loans can get you into trouble because as the interest builds while you wait for your return, you may lose a significant amount of your refund.

E- File and Additional Help

If your preparer cannot file your return electronically, it means that they prepare and file returns infrequently. This is a red flag. Also, make sure you have a way to contact and follow up with your preparer if the IRS has an issue with your return. You don’t want any problems on your plate instead of your preparer’s.

Choose a Tax Preparer That’s Right For You

To choose a tax preparer, you need to keep a few basics in mind. First, ask yourself how complicated is your return, and do you have the potential for significant penalties?

Make sure you check your preparer’s experience and ask about fees upfront.

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