| Whether you are using the tax preparer from last | | | | year, be skeptical if they aren't asking new tax |
| year for your income tax return or are planning on | | | | questions this year. Your financial condition can change |
| hiring a new one, be sure to thoroughly evaluate them. | | | | from year to year so they should be cognizant of this |
| There have been more changes to the tax code this | | | | possibility since it can impact your income tax return. |
| year than perhaps any year in history, so having the | | | | Ask Who Will be Doing the Tax Work |
| right tax preparer is extremely important. Here's some | | | | Often times, especially at larger firms, the senior |
| guidance on how to evaluate a tax preparer. | | | | partners will have accounting staff do most of the tax |
| Verify Their Tax Credentials | | | | work. This is okay as long as the firm has a thorough |
| When you first meet the tax preparer, look for a CPA | | | | review process and the partner or senior accountant |
| or Enrolled Agent license in their office. If you don't see | | | | signs off on the return before it is filed. But, ask about |
| a license, then red flags should immediately go up but | | | | their process and who you would be contacting if you |
| be sure to first ask if they have a tax or accounting | | | | need tax help at any time. |
| license. If they don't, then you should not use them for | | | | Ask About the Fee Structure |
| any type of tax work. If they do, quickly write down | | | | Most accountants charge a flat fee for an income tax |
| their license number so that you can verify them later. | | | | return. Anywhere from $150 to $500 per return, |
| Verifying CPA Licenses | | | | depending on the complexity. Generally, the price tag |
| Check the AICPA List of State Boards of | | | | goes up if it's a tax return for a business. |
| Accountancy or contact the state board directly. | | | | Also, ask what the fees are for consulting type tax |
| Verifying Enrolled Agent Licenses | | | | help since those are usually set on an hourly basis and |
| Check the National Association of Enrolled Agents or | | | | can add up quickly. |
| contact the IRS directly. The databases will list the | | | | Lastly, remember to ask your tax preparer if their fee |
| status of the licensee and if any disciplinary action has | | | | structure changed at all from this year to last year. |
| been levied against them. If you cannot find the | | | | You have a right to know how much more they are |
| preparers in the database, don't be alarmed yet, first | | | | going to charge for tax help, so ask! If they changed |
| contact the state board or the IRS directly. | | | | their fee structure ask why it has changed. |
| Check The Database Again | | | | Inquire About Recent Changes in Tax Law |
| Even, if you are using the same tax preparer from last | | | | All tax preparers should be fairly familiar with changes |
| year, you should also check the database again as | | | | to the tax code that would impact taxpayers. For |
| their status can change from year to year. | | | | instance, they should know -- whether or not it is smart |
| They Should Also Be Evaluating You | | | | for you to convert a Traditional IRA to a Roth IRA, the |
| It is a bad sign if the preparer isn't asking any of these | | | | details of the first time home buyer tax credit and |
| types of questions during the meeting. | | | | other new tax credits available as a result of the |
| 1) Who were your previous tax preparers and why | | | | American Recovery Act. If they don't have an opinion |
| are you no longer using them? | | | | or seem uninformed on any of these tax topics, you |
| 2) What type of income and expenses do you | | | | should probably seek tax help elsewhere. |
| normally report? | | | | Ask About the Types of Clients They Serve |
| 3) Are there any previous tax liens against you? | | | | You want to make sure that the tax preparer has tax |
| 4) How is your credit report? | | | | experience with similar businesses and individuals in a |
| 5) Do you invest capital in any businesses? | | | | similar position to yourself. Ask about the industries |
| 6) Do you have a family with children & how | | | | they serve & the complexity of the clients they |
| many homes do you have? | | | | serve. You want it be the right fit. Also, if you know |
| 7) When do you plan on retirement and what is | | | | someone that has used this tax preparer before, you |
| currently included in your estate? | | | | should ask them about their experience -- What they |
| Just as you are evaluating the tax preparer, they | | | | liked and what they didn't like? |
| should be evaluating you to reduce the risk of any | | | | This is a Starting Point |
| issues with the tax return. So, in a way, you both | | | | I have highlighted the steps you should start with when |
| should be acting as IRS agents, asking relevant | | | | evaluating a tax preparer. However, each situation is |
| questions. | | | | different, so you may need to do additional due |
| Also, even if you are using a tax preparer from last | | | | diligence to find the right preparer for tax help. |