5 Steps to Finding Your Tax Preparer

5 Steps to Finding Your Tax Preparer

According to tax professionals, many folks who had simple returns in the past have more to consider this year, such as income from loan modifications, or money taken out of 401(k) plans.

“The more complex the filing…the more difficult it is to prepare," says Jill Senso educational coordinator for the National Association of Tax Professionals. That is why when money from many different sources moves around, it might be time to get a good tax preparer.

Getting Professional Tax Help
Finding someone who can make sense of your earnings (and save you a bit of money) can be difficult, especially for those used to spending half-an-hour on TurboTax (Stock Quote:  INTU).

Here are five steps that you can take right now in order to find the right tax preparer for you:

1. Know the types of tax preparers. According to the Internal Revenue Service, there are at least 1.2 million tax preparers working in the U.S., but these range from highly specialized professionals to kind souls who may do their friends’ taxes every once and awhile.

Some specialists include certified public accountants (CPAs), tax attorneys and enrolled agents (EAs). All three are qualified to represent taxpayers in audits before the IRS, but each is regulated by a different authority. CPAs are governed by the American Institute of Certified Public Accounts as well as each state’s accounting society, tax attorneys answer to the American Bar Association’s taxation section and their state bar association, while EAs are accountable to the IRS’ Office of Professional Responsibility.

Though each position is different, each one has to sign off on every tax filing that comes across their desk.  Your average, neighborhood tax guy may not be regulated by any agency. So, keep in mind that if he or she screws up, you’ll bear responsibility for the mistake and will be penalized accordingly.

2. Know what you’re looking for. You wouldn’t hire a plumber to lay concrete, so don’t make the mistake of calling the wrong tax expert. If you’re filing a 1040 and don’t have a home or children, you may not need to cal out the big guns in order to get your taxes done. However, if you have to file a 1099-C for the cancellation of debt, a 1098 to report interest on a mortgage or if you have any rental or investment income, you may want to schedule some time with a CPA, EA, tax attorney or reputable tax preparer.

3. Understand the value of continuing education. There have been no fewer than six additions to the existing tax laws in the last 12 months, according to the National Association of Tax Professionals. While it’s difficult for regular folks to keep up, tax preparers have a duty to know how those changes will affect you.

Professional organizations offer continuing education opportunities for tax preparers. Ask your preparer how many additional hours of training they have received in the last year. If they haven’t been to class in awhile, you may want to find someone who has.

4. Check your preparer’s professional affiliations. Find out how long your preparer has been in business as well as whether or not the preparer belongs to professional organizations such as the National Association of Tax Professionals (NATP), the National Association of Enrolled Agents (NAEA) or the American Institute of Certified Public Accountants.

5. Do an informal background check. Go online to find out if your tax preparer has been issued any kind of citation. Curious consumers should start with a Google (STOCK QUOTE: GOOG) search. Look for any indication that he or she has prepared fraudulent filings in the past, in which case you may want to avoid them.

You can also check in with the following organizations, which may be able to provide information on a tax professional you are considering hiring, or point you in the direction of someone else in your area: