If you choose to have someone prepare your tax return, it’s important to choose wisely. You’re trusting this person with your financial information and depending on them to report that information accurately to the IRS so that you don’t encounter penalties. But how do you know if your tax preparer is right for you or your business?
Most tax preparers are professional, honest, and provide excellent service to their clients. Unfortunately, dishonest tax preparers who file false income tax returns or file without regard to compliance still do exist. Although the tax preparer always signs the return, you are ultimately responsible for the accuracy of every item reported. So how do you find a tax preparer you can trust? Here are 3 main qualities you should look for.
Are they properly qualified?
The first thing you should look for is a tax preparer who is qualified. Anyone paid to prepare tax returns for others should have a thorough understanding of tax matters. They are required by law to have a preparer tax identification number (PTIN) and include it on the return along with their signature. Most tax preparers will also need an Electronic Filing Identification Number (EFIN) to e-file on your behalf. Make sure your tax preparer has up-to-date identification and can legally file your return.
You should also check the credentials of your tax preparer. Only attorneys, enrolled agents (EAs), and certified public accountants (CPAs) can represent taxpayers before the IRS in all matters, including audits, collections and appeals. Non-credentialed tax preparers are not qualified to represent taxpayers, not even for audits of the returns they prepared.
Do they communicate well?
Your tax preparer should have good communication skills. During the preparation and filing process, you want to work with someone who clearly explains things to you in a way that you understand. They should provide information and advice on a regular basis and communicate with you to make sure they have all the necessary information to prepare your return.
If the IRS examines your return and has questions, communication remains important even after your return is filed. On your tax return, you can designate your paid tax return preparer or another third party to speak to the IRS concerning its preparation, payment or refund issues, and mathematical errors. Consider whether the individual or firm will be around for months or years after filing the return to answer questions about its preparation.
Do they offer the services you need?
You also want to look for a tax preparer who has the right skill set for you. Are you filing just as an individual, or are you filing business taxes, too? Make sure your tax preparer offers the service you need. Consider the industry your business is in and look for a tax preparer who is comfortable working with the requirements and regulations for your industry.
Consider what other services you may need in the future, as well. Do you just want your taxes prepared, or do you want someone who can be an advisor to you and your business? Do you need accounting or payroll management services? You may want to consider finding a tax preparer who offers these other services so you have everything you need in one place.
Unless tax law is a hobby of yours, you probably need a tax professional to help you prepare your return — especially if you’re a business owner. To the government, your business is just a series of transactions, and the IRS places the same emphasis on reporting requirements for a small business as they do a large one. A good tax preparer can help you comply with requirements and avoid costly mistakes.
If you don’t have a tax preparer yet or your current one isn’t a good fit, Padgett has a nationwide network of EAs and CPAs who are ready to help! When you work with a Padgett partner, you’ll find someone who understands your business and can be your advisor as well as your tax preparer. Find an office near you today.