Tips for Choosing a Tax Preparer
Check the Preparer’s Qualifications. Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool helps taxpayers find a tax return preparer with specific qualifications. The directory is a searchable and sortable listing of preparers.
Check the Preparer’s History. Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to the verify enrolled agent status page on IRS.gov or check the directory
Ask about Service Fees. Avoid preparers who base fees on a percentage of the refund or who boast bigger refunds than their competition. When asking about a preparer’s services and fees, don’t give them tax documents, Social Security numbers or other information.
Ask to E-File. Taxpayers should make sure their preparer offers IRS e-file. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and use direct deposit.
Make Sure the Preparer is Available. Taxpayers may want to contact their preparer after this year’s April 17 due date. Avoid fly-by-night preparers
How to Find a Tax Preparer for Your Business Taxes
Don’t wait until the end of the year to hire a tax preparer. You can find and begin working with someone on your business taxes at any time. This article provides some tips on finding a tax preparer who will do good work for you.
CPAs vs. Tax Preparers
Business owners should understand that not all tax preparers are CPAs, and not all CPAs do tax preparation work. While you don’t necessarily need to hire a CPA to do your taxes (there are many competent non-CPA professional tax preparers), you do need to consider what other kinds of services you might need, like choosing accounting software, setting it up and getting trained, data entry tasks, and review of records for tax evaluation
Licensing Requirements for CPA’s
The licensing requirements for CPAs vary from state to state as do the minimum and ongoing educational requirements. All U.S. CPAs have to pass a uniform examination, but the educational requirements to get (and stay) licensed are decided by the individual states. And CPAs may not be required to keep up to date on tax laws every year, so being a CPA doesn’t guarantee that the individual knows any more about taxes than when he or she originally passed the CPA exam
What an Enrolled Agent Does for Business Taxes
An enrolled agent is a person who has either passed a standardized test that covers all parts of the tax code or who has at least 5 years’ experience working for the IRS in a qualifying position. EAs are required to have 72 hours of continuing education every 3 years with a minimum of 16 hours every year. Like CPAs, they have to take an ethics course. Unlike CPAs (who can take accounting, management, technology, and personal development courses), EAs have to take all their courses in the area of Federal taxation.
Selecting a CPA for Business Taxes
First, decide what kind of services you need. You may determine that you want someone to help with tax planning, to find someone who can help figure out the best ways for you to structure employee benefit plans and retirement programs to get the maximum tax savings.
Tips for Choosing a Tax Preparer
Understand tax preparer qualifications
According to the Better Business Bureau (BBB), there are around 700,000 non-credentialed tax preparers in the U.S. Many states don’t require tax preparers to pass an exam or obtain a license. While non-credentialed tax preparers may be top-notch preparers, they have limited representation rights and can’t represent you in court or regarding appeals or collection matters
Search by qualifications
If you need a tax preparer with specific qualifications such as enrolled agent, attorney, Certified Public Accountant or enrolled retirement plan agent, search the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications
Interview tax preparers
Make sure a tax preparer has an active preparer tax identification number (PTIN) through the IRS and check whether the person meets state requirements. Then interview the tax preparer thoroughly. Ask about fees, availability and what kinds of records the tax preparer will need.
Check the tax preparer’s history
The IRS recommends contacting the Better Business Bureau before hiring potential tax preparers. Also check with the appropriate state agency for disciplinary actions and licensed status on credentialed preparers.
Get trusted referrals
One of the best ways to find a tax preparer you trust is by asking friends and family for recommendations. That doesn’t mean you should hire your tax preparer sister-in-law just because she’s family, though. Before hiring any tax preparer, perform a BBB search for details on consumer reviews or complaints
How to Find the Right Tax Accountant
Running your own business can start off like being a one-man band. In the early days, maybe it’s just you up there doing everything. It’s the business equivalent of a singer-songwriter paying their dues at an open mic night.
But as you start having some success, you play bigger and bigger venues, and it makes sense to start putting a band together. And when the band gets big enough, you need to get someone to keep track of T-shirt sales and make sure the promoter’s checks clear
Why You Need a Tax Accountant
First things first. Your specialty is running a business. You’re passionate about it, and you’re really good at it. But the government wants its cut, so you have to pay your taxes. Do you have the time and energy to keep track of changes to the tax code? Do you have time to sift through your receipts and figure out which business expenses count as deductions and which ones don’t?
How to Find the Right Tax Accountant
Finding the right tax accountant is important to the success of your business, so you want to make sure you do it right. You need someone who not only knows the tax code, but also someone who can explain it to you. After all, it’s your business, and you’re ultimately responsible for whether you turn a healthy profit or end up in court fighting a tax lien
Do your research.
When you search for a tax accountant online, check out their credentials. Look for a certified public accountant (CPA), a licensed tax attorney or an enrolled agent. When you interview prospective accountants, make sure they have a Preparer Tax Identification Number (PTIN). They’re going to be preparing your taxes, and the IRS requires their PTIN on your return.
Tips for Finding the Tax Advisor Who Will Save You Millions
One of the most important things an entrepreneur can do to protect their wealth is to find a not-just-good-but-great tax advisor, because a the right advisor can save a business owner literally millions of dollars over a lifetime
Find a passionate CPA versus a mass-production company.
The best tax professionals are always CPAs, Certified Public Accountants. Most business owners should use a CPA because these professionals are the most knowledgeable and passionate about reducing taxes. The second option is an enrolled agent, and finally, there are the mass production companies like you find in the mall. Some very small businesses can get by with an enrolled agent. Business owners and serious investors should never use a mass production company or do their own taxes
Look for a CPA with great tax education and experience.
A tax advisor’s education can make a huge difference in long-term tax savings. For example, the best CPAs graduated at the top of their class from top universities, worked for a Big 4 Accounting Firm (Price Waterhouse Coopers, KPMG, Deloitte & Touche and Ernst Young) and embrace the details in the law.
Find a CPA who’s thinking is nonlinear.
While most accountants think in a straight line, a better accountant finds creative (and legal) ways to use the law to save the taxpayer money. Unsophisticated accountants will recommend that you postpone your taxes through an IRA or 401K and pre-pay expenses at the end of the year. The right accountant will spend months with you developing a lifelong tax strategy to create permanent tax savings
Hire a tax advisor who asks you questions.
If you have to ask all the questions during the initial interview, this should be a red flag. Instead, look for a tax advisor who asks more questions about your long-term goals and financial dreams. Only a thorough diagnosis by a tax professional will lead to major tax savings.