Are you looking for a professional tax agent to help you through your unique tax situation? Working with an enrolled agent is an excellent choice for those facing complex and difficult dynamics. Nerd Wallet shares some tips below to help you find a qualified tax expert:
So if you’re searching for help, here are seven tips on how to find the best tax preparer or tax advisor for you.
- Ask for a Preparer Tax Identification Number (PTIN)
The IRS requires anyone who prepares or assists in preparing federal tax returns for compensation to have a PTIN. Note the phrase “for compensation” — volunteer tax preparers don’t need PTINs. Make sure your income tax preparer puts his or her PTIN number on your return — the IRS requires that, too.
- Require a CPA, law license or Enrolled Agent designation
A PTIN is relatively easy to get, so go a step further and get a credentialed preparer — someone who’s also a certified public accountant (CPA), licensed attorney, enrolled agent (EA) or who has completed the IRS’s Annual Filing Season program. The Accredited Business Accountant/Advisor and Accredited Tax Preparer are examples of programs that help preparers fulfill the Annual Filing Season Program requirement. These credentials all require varying amounts of study, exams and ongoing education
How do you find the best tax preparer near you with the credentials you want? One way is to search the IRS’s directory. It includes preparers with PTINs and IRS-recognized professional credentials. Volunteer preparers and preparers with just PTINs won’t be in the database.
- Look for friends in high places
Membership in a professional organization 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 good thing to have in a tax advisor, as most have codes of ethics, professional conduct requirements and various certification programs.
- Compare fees
How much do tax preparers charge? The average fee for preparing a Form 1040 is $203, and tax preparers who don’t use a flat rate typically charge $138 per hour, according to the National Society of Tax Professionals. Often, tax preparers either charge a minimum fee plus cost based on the complexity of your return (that minimum fee ranges from $160 to $172 on average), or they charge a set fee for each form and schedule needed in your return (filing a Schedule C might cost an extra $84 on average, for example). If you come across a tax preparer whose fee is based on the size of your refund or who says he or she can get you a bigger refund than the next guy, that’s a red flag.
- Reconsider tax advisors who don’t e-file
The IRS requires any paid preparer who does more than 10 returns for clients to file electronically via the IRS’s e-file system. If your tax preparer doesn’t offer e-file, it may be a sign the person isn’t doing as much tax prep as you thought.
- Confirm they’ll sign on the dotted line
The law requires paid preparers to sign their clients’ returns and provide their PTINs. Never sign a blank tax return — the preparer could put anything on the return, including their own bank account number so they can steal your refund.
- Check if they’d have your back
Enrolled agents, CPAs and attorneys with PTINs can represent you in front of the IRS on audits, payments and collection issues, and appeals. Preparers who just have PTINs can’t — even if they prepared your return. Preparers who complete the Annual Filing Season Program can represent clients only in limited circumstances.
Availability is also crucial. Even after the filing season is over and your tax return is history, the best tax preparers will take your call, respond to your email, or welcome you for a visit.
Why Choose an Enrolled Agent?
According to the IRS:
An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee.
Enrolled agent status is the highest credential the IRS awards. Individuals who obtain this elite status must adhere to ethical standards and complete 72 hours of continuing education courses every three years.
Enrolled agents, like attorneys and certified public accountants (CPAs), have unlimited practice rights. This means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.
Why Join TxSEA?
TxSEA makes it easy for enrolled agents in Texas to stay on top of the credits they need to maintain their licensing, as well as provides an opportunity for networking with other EAs in their local area. This can provide helpful information and leads to tax professionals working as enrolled agents today.