How to Find the Best Tax Preparer or Tax Advisor

Perhaps you’ve already dealt with a tax preparer, but did you ever inquire about their credentials?

Even though tax consultants have access to information about your most personal facts, such as your bank accounts, marriage, children — even your Social Security number — many people don’t.

Aside from evaluating a tax preparer, there are a few additional things to consider when looking for tax assistance. Here are seven pointers to help you pick the finest tax preparer or counsellor for your needs.

1. Ask for a Preparer Tax Identification Number (PTIN)

A PTIN is required by the IRS for anybody who prepares or aids in the preparation of federal tax returns for a fee. Volunteer tax preparers do not require PTINs, as stated in the phrase “for compensation.” Make sure your tax preparer includes his or her PTIN number on your return, as required by the IRS.

2. Require a CPA, law license or enrolled agent designation

Get a qualified preparer – someone who is also a CPA, certified public accountant, licenced attorney, EA, enrolled agent, or has completed the IRS’s Annual Filing Season programme. Programs such as Accredited Business Accountant/Advisor and Accredited Tax Preparer can assist preparers in meeting the Annual Filing Season Program requirement. All of these qualifications necessitate varied levels of study, examinations, and continued education.

3. Look for friends in high places

A tax advisor’s membership in a professional organisation such as the National Association of Tax Professionals, the National Association of Enrolled Agents, the American Institute of Certified Public Accountants, or the American Academy of Attorney CPAs is always a plus, as most have codes of ethics, professional conduct requirements, and various certification programmes. If you already have a financial advisor, they may be able to put you in touch with a tax professional.

4. Compare tax advisor fees

What are the fees charged by tax preparers? According to the National Society of Accountants, the average charge for producing a non-itemized Form 1040 in 2020 was $220. The charge for an itemised form 1040 increased to $323. Tax preparers frequently charge a predetermined fee for each form and schedule required in your return, or a minimum fee plus costs dependent on the complexity of your return. It’s a red flag if a tax preparer bases their fee on the size of your refund or claims to be able to obtain you a higher refund than the next person.

5. Reconsider tax advisors who don’t e-file

Any paid preparer who prepares more than 10 returns for clients must use the IRS’s e-file system to submit their returns. If your tax preparer doesn’t offer e-filing, it could mean they aren’t doing as much work as you think.