Before you choose an income tax preparer, you should decide what type of services you need and how much you can afford to pay. Do you want to save time, money, or both? Is it important that you have the same person prepare your taxes next year? Are you looking for someone to just compute your tax return? Or, do you need someone to act as a financial advisor year round?
As a general rule, the more complex your tax situation is, the more you will require the advice of someone with specialized experience. For recognized professionals, such as EAs, accredited tax advisors, accredited tax preparers, CPAs and tax lawyers, you may assume a level of special training and experience, although you should inquire about their primary area of practice. For other tax preparers you will have to determine the level of their expertise.
Research a tax preparer just as you would any other service provider. Ask for referrals from friends and colleagues, or contact the national or state associations and societies and ask for their recommendations. Then interview the preparer, either over the telephone or drop by for an office visit. Before you hire a person to prepare your taxes, be certain that he or she has the expertise you are searching for, and can provide the services you need at a cost you can afford.
Discuss the cost of the service and ask for an estimate of fees. The fees should be based on the complexity of the return, and never on the size of the tax saving or refund. A tax preparer never should guarantee a refund before completing a return. Some preparers offer immediate payment of returns, for a fee. Keep in mind that this is a loan. If you accept the offer, be certain that you are aware of the terms. Read the fine print before signing any agreement.
Ask the preparer the following list of questions to help you evaluate whether he or she is right for you and your tax situation:
1. What tax preparation training and experience does the preparer have?
2. Is the preparer an enrolled agent, accredited tax advisor or preparer, certified public accountant or tax lawyer?
3. How does the preparer keep abreast of tax laws and changes?
4. Will you be interviewed by the same person who will prepare your return? The interview process is important in recognizing deductions, adjustments and tax credits. You will want more interaction than just having a clerk fill in lines on the form.
5. How many tax forms does the preparer complete each year? Determine that he or she has ample time to devote to reviewing your situation.
6. Does the preparer have any experience in your area? Certain tax situations lend themselves to specialization. A small business owner, self-employed individual, physician or child care worker, for instance, can benefit from a preparer's in-depth knowledge of their specific field.
7. How does the preparer check the accuracy of his or her work? Does the return pass through an audit by one other person, or several people? Is it checked manually or by computer? Is the return checked simply for mathematical errors, or are errors in the interpretation of tax rules also verified?
8. Can the preparer be reached during the year? In the event that your return is audited, you will need to contact your preparer.
9. Can the preparer represent you in an audit? Only EAs, CPAs and lawyers are authorized to represent you before the IRS. Determine that your preparer is willing to represent you should it become necessary, and at what cost.
10. How is the fee determined? Most tax services have a set schedule of charges according to the number of forms that are used and filed. Professionals usually charge by the hour, but fees can range across the board from one individual to another, so be certain you have a clear understanding of the cost, and what it includes. Ask for an estimate.
11. What is the turnaround time for the return? Will all the forms be completed at the end of the interview session, or will it be necessary for you to return to pick them up? How long will the process take?
This information provided by the Better Business Bureau.