Finding a reliable tax preparer is essential since they handle sensitive information like your bank details, family circumstances, and Social Security number. Here are eight tips to help you choose the right professional. Check this also tax accountant in Toronto
Check for a Preparer Tax Identification Number (PTIN) Ensure the tax preparer has a Preparer Tax Identification Number (PTIN), which is required for anyone preparing federal tax returns for compensation. Make sure they include their PTIN on your return. Only volunteer preparers are exempt from this rule.
Seek Proper Credentials Look for preparers with qualifications such as a certified public accountant (CPA), a licensed attorney, or an enrolled agent (EA). These experts have passed difficult exams and maintain high standards of professionalism.
Membership in Professional Organizations It’s beneficial if your tax preparer is part of a professional association. These organizations uphold codes of ethics and require members to stay updated on tax regulations. Membership can indicate reliability and expertise.
Conduct a Background Check to Research the preparer’s background and credentials. Verify their history through local resources or relevant authorities. For example, check an EA’s status with tax authorities, a CPA’s license through a state board, or an attorney’s standing with the local bar association.
Compare Tax Preparation Fees Understand the average fees for tax preparation. Some charge based on the complexity of the return, while others have fixed rates for different forms. Be cautious of preparers who base their fees on your refund amount or promise to get a larger refund than others, as this can signal unethical practices.
Ensure They Use E-File Paid preparers filing more than 11 returns must e-file. If your tax preparer does not offer electronic filing, it may indicate a lack of experience or outdated methods. E-filing is more efficient and speeds up processing.
Verify They Will Sign Your Return Paid tax preparers are legally required to sign your return and include their PTIN. Never sign a blank tax return, as it could be misused to alter details or steal your refund. Ensure your preparer signs the completed return before submission.
Check for IRS Representation Only enrolled agents, CPAs, and licensed attorneys with PTINs can represent you before tax authorities for audits, appeals, or collections. Preparers with only a PTIN but no additional qualifications cannot represent you.
Also, consider the preparer’s availability. The best ones will be there to answer questions or handle issues even after the tax season. If meeting in person isn’t necessary, you can explore tax services that offer online or virtual help.
Is Hiring a Tax Preparer Worth It? For simple returns, using free or low-cost tax services may suffice. However, if you run a business, had significant life events, or need advice on investments, hiring a professional is wise. Even if you self-file, understanding your return helps you learn more about your taxes.
Understanding the difference between a CPA and a tax preparer is also crucial. A CPA has a specific education and passed rigorous exams, while a tax preparer is a broader category. All paid preparers must have a PTIN, regardless of credentials.
