Not everyone is well-versed in the complexities of the tax world, its codes and deductions. But just like finding the right doctor takes some time, searching for the perfect tax preparer may require patience, too. We have discussed a few tips that can help you choose the right preparer.
Key Points To Keep In Mind While Selecting Your Tax Preparer
Here is what you should look out for:
1. Ask For Their Preparer Tax Identification Number (PTIN)
Start off by asking about their PTIN. The Internal Revenue Service (IRS) has made it mandatory that anyone who prepares federal tax returns for compensation purposes must have a Preparer Tax Identification Number. This ensures that your professional is recognized by the IRS and abides by its regulations.
2. Search For a Certified Professional
Consider the PTIN number as a fundamental requirement. It is better to go the extra mile for a tax professional with additional credentials. People who are certified public accountants (CPA), licensed attorneys, or enrolled agents (EA) have extensive education and training, ensuring a higher level of expertise. Moreover, select tax professionals who have participated in the IRS’ Annual Filing Season program, such as Accredited Business Accountants/Advisors and Accredited Tax Preparers.
3. Utilize IRS Resources
You can now utilize the IRS’s directory to find the right tax preparer with the desired credentials. This resource has in-depth information about preparers having PTINs and IRS-recognized professional designations, excluding volunteer preparers and those with only PTINs.
4. Comparison of Tax Preparation Fees
You must have a basic know-how about the cost of tax preparation. In 2023, the average charging fee for a non-itemized Form 1040 is around $210. On the other hand, an itemized Form 1040 may cost you around $256. It is up to the tax preparers to either charge a minimum fee or additional costs based on your tax return’s complexity.
A word of caution: Be on the lookout to steer clear of any tax preparer who bases their fee on the amount of your refund; it is often a red flag.
5. Verify E-Filing Services
The IRS instructs tax preparers who handle more than 11 returns for clients must file through the electronic means in the IRS’s e-file system. If your tax preparer does not offer e-filing, it indicates a lack of involvement in tax preparation.
6. Ensure They Sign Your Return
It is legally essential for paid tax preparers to sign your return and provide their PTIN number with it. You must note never to sign a blank tax return, as this opens the door for potential fraud.
7. Check Their Representation Abilities
Enrolled agents, CPAs, and attorneys with PTINs are authorized to represent you in front of the IRS on audit, payment, collection, and appeals matters. However, preparers with simple PTINs cannot represent clients except in limited circumstances for those who have completed the Annual Filing Season Program.
Although finding the right professional tax preparer may seem like an effort that requires time, it is worth it to ensure a stress-free and accurate tax filing. You can get in touch with our attorneys from Edwards Sutarwalla Samani LLP to help you file your taxes properly following guidelines. Call us at (713) 565-1353 to get started.