Getting Professional Help: Answer These 9 Questions Before Choosing a Tax Preparer

By all accounts, the U.S. Tax Code  is long, extremely detailed and confusing.  It's no wonder that millions of taxpayers employ professionals when "tax time" rolls around each year.   Even when professionals are used, individual taxpayers are held liable for any and all information contained in their personal returns.  Before paying anyone, getting the answers to these 9 questions will help all taxpayers get the professional tax help that is best for them.

1. What designation(s) does the tax preparer hold? 

Certified Public Accountant (CPA) - In addition to receiving a degree in accounting, these professionals are granted licenses in their respective states after passing a national exam and fulfilling any other specific requirements for that state. Tax Attorney - A licensed attorney with specialized education and experience in tax matters. Enrolled Agent - These professionals have fulfilled specific requirements and are licensed with the U.S. Treasury Department to be able to represent taxpayers at any level of inquiry regarding their tax returns. Other Tax Professionals -National tax preparation services like Jackson Hewitt and H & R Block employ many seasonal workers to prepare tax returns.  Some of these workers are retired from careers with financial backgrounds.  Others, are trained specifically for using the software these companies provide.

2.  Does the preparer belong to any professional association (s)? 

Tax laws change each and every year.  Professionals that join and maintain membership with professional associations are more likely to have access to the most current information and education regarding changes in tax laws and/or the way(s) that those changes affect specific circumstances.  Additionally, it's important that professional preparers participate in continuing education necessary for their industry.

3.  Do you have a personal recommendation for this preparer?

One of the best ways to identify professional help, in any field, is through personal recommendations.  Find out which tax preparers your friends, family and co-workers use.  Especially if you have never used a tax professional or if you are new to a particular area, it will give you confidence and credibility for this important task.

4.  Are there special tax circumstances that a preparer will need to consider?  If so, what are they?

For financial circumstances that are particularly complex and/or for situations where significant changes may affect tax liabilities, it is worth the time to find someone that is familiar with those specific areas.  Before searching for a preparer with a specific background, make sure to list any special circumstances that may need to be considered in your return.

5.  Does the preparer provide clear, understandable information about the rates/fees they charge?

In all but a very few cases, professional tax preparation is worth whatever it costs!  For most people, that cost should not be prohibitive.  Before turning over personal and financial information to anyone for the purpose of preparing your returns, make sure that you have some idea about rates/fees to be charged as well as knowing how that rate/fee will be calculated.  Stay away from preparers that receive a percentage of the return they obtain and anyone that cannot provide a fairly reasonable estimate about what their services will cost.

6.  Is the preparer easy to access and contact?

It's important to be able to contact a tax preparer whenever you have questions.  Even if it is not tax season, you will want to know that your tax professional is easily accessible.  When considering who to hire, ask about the best way to contact them with questions and concerns.  Also, find out when and if additional charges will be assessed for out of season consultation.

7.  Has the preparer been reported to professional organizations and/or licensing agencies because of questionable conduct?

Tax professionals that have been reported for improper conduct of any kind should be avoided.  Likewise, it is important to note any complaints that may have been registered against a potential tax preparer.  Certainly, some complaints can be nothing more than personality conflicts.  A pattern of complaints and/or improper behavior, though, should be a definite signal to find someone else.

8.  Does the preparer answer questions and concerns completely?

Since taxpayers are ultimately responsible for the information included on their tax returns, it is vital to understand that information.  Choose a preparer that is willing to spend time to explain what is included in your return.  Also, make sure that the preparer is able to answer questions completely without making you feel like you are intruding on their time.  A preparer that takes the time to teach during the filing process shows that they are interested in the relationship they are building as well as the income they are earning.

9. Does the preparer offer "electronic filing"? 

Electronic filing is faster than filing on paper.  It also provides an opportunity to track your return and make sure that it has been received.  Using a preparer that offers electronic filing is one indication that they are staying current in the industry.  There may be some fees associated with filing electronically.  Any fees for e-filing, should be small.  If your preparer charges large e-filing fees, it might be an indication that you should find someone else.

Preparing taxes can be an intimidating, overwhelming process.  Fortunately, there are plenty of trained tax professionals that are willing to help with this annual task.  Answer these questions first then choose with confidence!

For more information, check these sites:

U.S. Internal Revenue Service - American Association of Certified Public Accountants - American Bar Association National Association of Tax Professionals - National Association of Tax Practitioners - National Association of Enrolled Agents