Thinking about handing over your taxes to a professional this year? Working with a tax accountant can simplify and streamline the tax preparation process, removing a lot of the hard work from your hands. But it is important to remember that you are liable for everything in your return, even when somebody else prepares it. For this reason, it is vital to make sure you are choosing the right person for the job. Here are a few tips to help you out.
1. Choose someone with suitable qualifications.
Technically, there are no qualifications for someone to refer to himself or herself as a “tax preparer.” Some tax preparers have no credentials but do have the knowledge to prepare a solid return. Still, it is a smart idea to look for someone who does have credentials, like a certified public accountant (CPA) or enrolled agent (EA). CPAs and EAs have passed exams and have both the education and professional experience to prove they can handle the job.
Whatever you do, do not choose a tax preparer who is not upfront with you about his or her background. Also, make sure the tax preparer you choose has a PTIN (preparer tax identification number).
2. Pick someone who understands your industry, locality, and tax situation.
Have a highly-specialized tax situation? Make sure you are choosing a tax accountant who can help you. Say for example you are an investor. Not every tax preparer will be able to wade through the complexities of your return. Or imagine you are self-employed and have an unusual tax dependent situation or earn income unevenly throughout the year. These are also situations which may call for a specialist.
3. Understand how fees are determined.
You cannot always get an upfront quote before you get a return prepared, but you should at least know what factors might influence your costs. A red flag is any advisor who varies their fee based off the amount of your refund. This is a potential conflict of interest.
4. Pick someone who is available when you need them.
Need help with your tax situation or other accounting procedures throughout the year? Choose a tax preparer whose doors will always be open to you. Some tax preparers are only available during tax season and will not be able to answer your questions or advise you at any other point of the year.
5. Choose someone who is clear about who will prepare the return and sign it.
From a legal perspective, this is incredibly important. If you want someone who will play an active role in assisting you in case of an audit, be sure to ask about that as well.
6. Choose an accountant you feel comfortable with.
Finally, while all the factors above are important, there are also some considerations which are less concrete to weigh before you agree to work with a tax professional. How do you feel when you are talking with the accountant? Confident? Uneasy? Do you communicate clearly with one another? What is his or her tax philosophy? Is it compatible with yours?
It takes time and research to pick a suitable tax accountant for your needs. Doing so is essential however to making sure that your taxes are appropriately prepared. The right decision will pay off financially while providing you with peace of mind.