Steps to Hiring a Tax Professional
There are many types of tax professionals who can help you. But deciding on the appropriate type of tax preparer is the simple part. Finding the right person for the job is the challenge.
If you’re thinking of hiring a professional tax preparer for the first time, or you’re planning to hire someone new because your current preparer is giving you issues, be guided by the following steps:
1. Get referrals.
Ask people around you – relatives, friends, colleagues, etc. – if they can recommend a good tax preparer. If you are new in the area, ask for referrals from with the CPA society in your state, explore the Accreditation Council’s website, or use the National Association of Enrolled Agents’ enrolled agent search tool.
2. Interview potential agents.
No matter how busy they are, tax preparers should have time for 20- to 30-minute phone interview. If they can’t give you that or if they are asking you to pay for the initial interview, go find a new prospect.
When interviewing a tax preparer, make sure you ask them about the following:
You’ll want someone who has been doing the job long enough to be able to anticipate IRS challenges and other potential issues.
Find someone who is an Enrolled Agent, an Accredited Tax Adviser, Accredited Tax Preparer or a Certified Public Accountant. And take note that only CPAs can have the Personal Financial Specialist, designation. Verify with your state’s licensing board and professional associations to make sure the candidate is licensed and is in good standing with no no disciplinary records.
If you have a specific need, this can be a crucial point. For instance, if you own a small business, you’ll need a tax preparer who is an expert in business accounting. Or if you’re renting out some properties, find someone with experience handing such a tax situation.
Know if the tax preparer you’re considering charges a flat or hourly rate, and whether that fee will be good for everything or there will be additional charges for planning meetings and calls over the entire year.
Single Practitioner vs. Firm
If the preparer you’re considering is part of a firm, ask whether they will double-check your returns once the associate has completed them.
Ask your prospective tax preparer if they will handle IRS issues. If not, forget it. You definitely will want someone who will defend your case.
3. Watch out for warning signs.
Avoid a tax preparer who offers to cheat the IRS to reduce your taxes. And finally, don’t hire them if they want a percentage of your refund as payment. Tax preparers should be paid a flat or hourly fee, period.