How to find a tax preparer

Photo by Nik MacMillan on Unsplash

You know that feeling when you are at the doctor’s office in a gown, with your backside exposed feeling really vulnerable?  Finding the right tax preparer can feel something like that. All of those extra lattes suddenly get questioned.  In fact, all of your decisions suddenly come into question and that’s why finding the RIGHT preparer with the right bedside manner FOR YOU is so very important.

Following is a quick guide to the different types of preparers that may help you in your quest and four bonus tips that may help match you to the right tax pro for you.

Unlicensed:  This is an inexpensive option but not recommended. If someone won’t sign your return, you shouldn’t pay them.  Not to mention many states don’t allow this type of preparer to be paid at all.  However, family members and helpful friends falls into this category.

LicensedCTEC is the California licensing board – preparers can be licensed by the states for which they want to prepare taxes.  Each state has their own licensing requirements.  My assistants are CTEC licensed and bonded.  They can have a wide variety of knowledge and can be capable of preparing a wide range of return types.  However, they are limited in their ability to represent taxpayers should the taxpayer get audited or get a letter.  Additionally, they tend to be less accepted by lenders, etc who want to verify tax returns for loan purposes.

EA – Enrolled Agent:  I am an Enrolled Agent and have the full rights to represent you in any state before the IRS.  In most cases, an EA can also represent the taxpayer before the state taxing authorities.  Right now, I represent an actor in a NY audit as well as a woman in Louisiana.  EA’s prepare all returns and are generally accepted preparers of all states returns.

CPA – if you will eventually need financial statements that are “Reviewed” or “Audited” you will need a CPA for that.  But they are the most expensive type of tax preparer (generally) and for tax purposes, are no more or less able to prepare or represent taxpayers than an EA.

Here are 4 more tips that may help when it comes to selecting your tax preparer: 

  1. Don’t select your professional purely on cost. Some things in tax may seem intuitive but generally aren’t.  
  2. Try to get someone with some experience or education in your field.  For instance, a cannabis business really will want someone who understands the compliance issues and the complex set of limitations regarding deductions.  
  3. Find someone who makes you feel comfortable – some people equate doing taxes with going to the doctor, feeling naked and exposed hoping for good news!  Be sure you are able to communicate well with your preparer.  
  4. Find a village. Make sure your tax preparer has backup for ancillary issues that affect you and pop up during the course of your interview – someone to help with investments, an estate attorney, a reputable insurance provider.  These ancillary professionals should be a part of their team because many of the issues that come up include these areas of practice as well and you want someone who can work well with your other professionals.

What about you?  How did you know your tax pro was the one for you?

We’ll chat again soon!


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