DYou may have worked with a withholding agent in the past, but have you ever asked about their powers? Most people don’t, despite the fact that tax advisors have access to information about your most personal details, such as bank accounts, marriage, children, and social security number.
In addition to checking the tax preparer, there are a few other things to consider when seeking tax assistance. Here are seven tips to help you choose the best tax preparer or tax advisor.
Check Your Taxpayer Identification Number (PTIN)
The IRS requires that anyone who prepares or assists in the preparation of federal tax returns for reimbursement must have a PTIN. Voluntary tax preparers do not need a TIN. Make sure your IRS includes your PTIN on your tax return; The IRS also requires this.
Check the CPA, legal license, or registered agent designation.
A PTIN is relatively easy to obtain, so do your best and hire a certified document preparer, i.e. someone who is also a Chartered Accountant, Certified Public Accountant, Licensed Attorney, Audit Counsel, Registered Agent, or has completed the annual IRS seasonal program. Accredited Business Accountant/Consultant and Accredited Tax Preparer are two programs that can help preparers meet the requirements of the annual filing season program. All of these credentials require varying amounts of training, exams, and continuing education.
One way to find a tax preparer is to browse the IRS directory. Preparers with PTINs and professional credentials recognized by the IRS are included. Volunteer trainers and compilers with only PTINs will not be included in the database.
Check Professional Organizations
Membership of a tax advisor in a professional organization such as the National Association of Tax Professionals, the National Association of Registered Agents, the American Institute of Certified Public Accountants or the American CPA is always a plus as most of them have codes of ethics. , professional conduct requirements and various certification programs. If you already have a financial advisor, they can put you in touch with a tax specialist.
Compare Tax Advisor Fees
According to the National Society of Accountants, the average fee to prepare a non-disaggregated Form 1040 in 2020 was $220. The fee for the detailed 1040 form has increased to $323. Tax preparers often charge a flat fee for each form and schedule required on your return, or a minimum fee plus expenses depending on the complexity of your return. It’s a red flag if the withholding agent is basing their commission on your refund or claims they can get you a bigger refund than the next person.
Consider hiring a tax advisor who
Any paid compiler who prepares more than 10 returns for clients must use the IRS electronic file system to file their returns. If your IRS doesn’t offer electronic filing, it may mean they aren’t doing as much work as you think.
Confirm that your document preparer signs your declaration
Paid compilers are required by law to sign their clients’ declarations and provide their TIN. Never sign a blank tax return because the preparer can write whatever they want on it, including their bank account number, to steal your refund.
Make Sure You Can Trust Your Tax Advisor
For audit, payment and collection matters, and appeals, registered agents, CPAs, and attorneys with a PTIN can represent you before the IRS. Even if they prepared your return, preparers who only have a PTIN cannot do so. Only in limited circumstances can document writers who have completed the Annual Seasonal Application Program be able to represent clients.
It’s also important to be accessible. The best tax professionals will answer your call, answer your email, or invite you over for a visit, even after filing season is over and your tax return is history.
If an in-person meeting with a consultant is not required, you can seek help online. Many online tax preparation consultants now provide real-time assistance, so you can get help right away if you have questions while filing.
For more advice on how to choose a tax advisor and/or document preparer, visit the IRS website.