How to Hire the Right Tax Professional

In my last article we explored how to determine when you should hire a tax professional. Since hiring a tax pro comes with a higher price than the software you buy to prepare your taxes, you may want to be sure you get the right one that fits your needs. Here are some tips to help you find and select the right tax professional.

Ask about credentials. Anyone can really call themselves a tax expert and people who file tax returns do not have to be licensed by the IRS. So, to be sure you have the right professional working for you, be sure to hire one of the following:

Local Chain Preparer (ie. H&R Block, Jackson Hewitt) – these individuals have been trained to fill out the tax forms and file taxes, but their experience and expertise varies greatly. Most are not full-time tax professionals. If considering working with one of them, they are ideal for simple tax returns for personal filing.

Certified Public Accountant (CPA) – CPAs are licensed and regulated by your state. They provide higher level taxes and accounting services for your business in addition to preparing tax returns. Typically larger businesses need a CPA to help them sift through more complex business tax returns and even payroll support. Check out aicpa.org and cpadirectory.com

Enrolled Agent (EA) – EA’s are licensed with the IRS. They have had to test to earn their license or have at least 5 years’ experience working for the IRS. They are the lease expensive tax pro and will typically offer additional services to support your small business. Go to naea.org to find a credentialed pro.

Certified Financial Planners (CFP) – CFP’s typically provided overall financial planning advice on savings, investing and retirement planning. However, some may offer tax planning services for a fee. Check out garrettplanningnetwork.com or napfa.org

Accredited Tax Accountant or Preparers – These professionals prepare business and personal tax returns, along with other tax planning services. To earn this designation, they do have to complete a tax exam. To find a pro, click “Consumers” at www.acatcredentials.org.

Tax Attorney – A tax attorney is a lawyer that specializes in tax law (should have a degree L.L.M in taxation) or is certified by the state bar as a tax specialist. You would only work with a tax attorney if you have issues with IRS tax returns, need help with business or estate planning.

Consider doing a background check. While dollar stretching is great, be sure to research the person you are considering hiring. Don’t just base it on price. Especially if you are a business owner, you’ll want to find someone you can establish an ongoing relationship with to provide tax support throughout the year. Here are some ways to check out their credentials and other reviews:

  • Your state’s CPA Board – https://nasba.org/stateboards/
  • Better Business Bureau – www.bbb.org
  • Your State Bar Association

Verify qualifications and credentials. Be sure your tax preparer has a Preparer Tax Identification Number (PTIN), which is required by the government. Also, ask what professional associations the preparer belongs to and check them out there. Ask how long they have been doing taxes, references and call them to determine if they are good fit for you.

Be sure they are compatible. Other than credentials and experience, make sure the tax professional makes you feel comfortable, takes time to answer your questions and provides you the service you want. 

To help you interview them, here are some questions you might ask:

  • What do you charge? What is included for that fee?
  • Do you provide support for questions after my taxes are filed?
  • What additional services do you offer?
  • What paperwork do you need from me to process my return?
  • What happens if my return is audited? What support do you provide?
  • Can I contact you after the April filing date if necessary?

Remember filing taxes is a big financial responsibility and choosing the right professional to help you maximize your return is very important. Take your time to consider what you need, which professional is the best fit all around, and the person you believe is going to provide you the best service for your money.

 

Laura Royer is a financial coach, trainer and founder of Catch Your Money. She can be reached at Laura@CatchYourMoney.com

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