Tax time doesn’t need to be traumatic. If your tax situation is just too complex for you to prepare your tax return by yourself, or you simply have no knowledge or desire to prepare your own tax return, consider hiring a qualified tax professional to help you. Having a competent tax professional fill out your forms and ensure that you have all the proper paperwork can take a big bite out of your stress level. But choosing the right professional to help you is critical. The last thing you want is for someone to prepare your taxes incorrectly and result in IRS audit or cost you thousands of dollars in back taxes. Here’s a short list of questions to ask that will help you determine if a tax professional is qualified to handle your taxes.
Are you licensed?
While the IRS doesn’t require paid tax practitioners to be licensed, there are many tax professionals who are licensed (CPAs, an IRS Enrolled Agents, or tax attorneys). So why would you want to work with a non-licensed tax preparer? Well… they are usually cheaper. But they also typically do not have the same knowledge and experience of someone who underwent the licensing process. Licensed professionals are also required to complete a certain number of hours of continuing education each year to keep their license. This means they’re more likely to be up to date on the most recent tax law changes.
How much do you charge your clients and how does it work?
Make sure you understand the rates and billing structure: will you be charged by the hour, by the form, or a flat fee? Does your tax preparer offer discounts for being organized or getting your financial information in early? Know how much you will have to pay, and what you’re getting, before you hand over your financial documents.
Are you familiar with my industry?
Tax professionals who are familiar with your industry will have a better knowledge of laws and regulations that pertain to your business. They will also know what deductions are considered allowable for a particular business.
How long have you been in business? Will anyone else work on my return?
Find out how long they’ve been in business. If their business is new, find out where they worked before. Ask if they do all the work themselves or whether they have other people help with the preparation. Junior accountants might work fine if seasoned professionals check their work. Make sure you’re comfortable with the answers you get.