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5 Questions to Ask Before Hiring a Tax Preparer

June 16, 2015 By Dana Davis 35 Comments

The Internal Revenue Service Code is confusing, and the rules and regulations change constantly. That’s why so many citizens hire a tax preparer to help them take care of this important responsibility.

Tax preparers may be enrolled agents, CPAs, attorneys, or registered tax professionals. These individuals take at least 15 hours of continuing professional education annually to maintain their designation.

I'm a Tax Preparer What Are You Gif

Before hiring a professional to handle your tax paperwork, ask a few questions.

Table of Contents

  • 1. Do you have a Preparer Tax Identification Number and have you registered with the IRS?
  • 2. What kind of returns do you prepare?
  • 3. What fees do you charge?
  • 4. Will you back me up in an audit?
  • 5. Are you available year-round or just at tax time?
  • Dana Davis
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1. Do you have a Preparer Tax Identification Number and have you registered with the IRS?

Individuals who charge a fee to prepare taxes must register with the Internal Revenue Service and receive a PTIN. Other credentials might be impressive, but they won’t be enough for an accounting professional to legally handle your taxes.

As 2290tax clarifies, anyone who intends to file for many different individuals or entities with different EIN’s is considered a Paid Preparer and needs to be registered with the IRS.

2. What kind of returns do you prepare?

Everyone’s tax return will be different. If you have any out-of-the-ordinary income or outgoings, you need a professional who has experience with your situation. For example:

  • Are you self-employed?
  • Do you own rental properties?
  • Are you an investor?
  • Has some of your income come from gambling?
  • Are you a student?

3. What fees do you charge?

Tax preparers structure their fees differently, so it’s important to know the method a professional uses before hiring him or her. Some of the ways accountants tally their bills include:

  • Billing at an hourly rate
  • Charging by the number of schedules and forms in returns
  • Using a combination of the two above methods

There is fluctuation in fee scales by region, and CPAs charge more than non-CPAs, so take that into account. Also, to save your tax preparer time and yourself some money, organize your paperwork ahead of time. If your tax pro has to sort through your receipts, it will take more time, which will cost you.

4. Will you back me up in an audit?

Be sure to find out what a tax preparer’s policy is if you get audited. Will you have to face the IRS alone, or will your preparer back you up? For example, will he or she:

  • Respond to IRS or state tax agencies if they send letters of inquiry?
  • Attend an audit with you?

5. Are you available year-round or just at tax time?

Some tax preparers work 12 months a year, so are available to answer questions or help you with tax planning, while others only work a few months each year. Even if he or she doesn’t prepare taxes year-round, find out if there is a way to contact your tax preparer should the need arise.

The individual who prepares your taxes plays a vital role in your financial well-being. Make sure you choose the right professional to meet your needs.

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Dana Davis

Dana Davis focuses on small business and the use of gifts to show appreciation in relationships. She researches gifts of all kinds and especially personalized and engraved executive gifts for ExecGiftsBlog.com.
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Filed Under: Small Business Advice Tagged With: taxes

Comments

  1. Bella D. says

    January 29, 2020 at 7:08 pm

    This article contains relevant information. Very helpful tips in deciding to hire a tax preparer for any business. Thank you for sharing your ideas.
    Bella D. would love you to read ..11 Top Reasons You Should Be Self Publishing On Kindle To Make Money OnlineMy Profile

    Reply
  2. Nova Accountants says

    October 31, 2019 at 12:21 am

    Very informative blog regarding the tax I learned a lot.
    Thanks for sharing this information.

    Reply
  3. John says

    August 20, 2019 at 4:17 am

    #4 and #5 are most important question to ask. No one will consider asking such things but these are too important. Hire a full-time tax consultant instead of someone who is only active during tax days.

    Reply
  4. Millie Hue says

    May 14, 2019 at 2:01 am

    Thanks for helping me understand that there are tax preparers who are only available for a few months a year that is why we should ask them about their schedule. My sister should know about this since she will be needing their services soon. It is when her dream business has opened, so she needs to file her taxes. As of now, the establishment is still being constructed, and it will be finished in the last weeks of June.

    Reply
  5. Gayathri Nair says

    February 28, 2019 at 4:14 am

    When to Hire a Tax Consultant . Don’t wait until the end of the financial year to hire a tax consultant. You can find and begin working with someone on your business taxes at any time. This article provides some important tips on finding a tax consultant.

    Having an experienced taxation team with exposure to different tax regimes in the Middle East, Sub Continent and Europe capable of advising and assisting businesses in the region to improve their systems and processes is critical.

    Reply
  6. Fred Dian says

    March 30, 2018 at 3:24 am

    Totally agree!!!!
    Best tips for hiring a good accountant for your business and its good for your basic knowledge about accountant…

    Thanks for sharing

    Reply
  7. Richard Yaffee says

    August 1, 2017 at 6:33 am

    Its really helpful for us to have an ideas on how to hire a good tax accountant. Thank you for posting this.

    Reply
  8. Richard Yaffee says

    July 20, 2017 at 9:07 am

    Good to have like this kind of article. It gives everyone knowledge in hiring a tax preparer.

    Reply
  9. Michael Smith says

    May 9, 2017 at 6:47 am

    Hii

    Great article!!

    It is true that a tax preparer is a person who is responsible for the preparation of tax return. Tax preparation may be done by the taxpayer without the help of tax preparation software.

    Or tax preparers may be the enrolled agents, lawyers, or registered tax professionals that resolve our queries regarding tax audit.

    Reply
  10. Heather says

    May 8, 2017 at 12:58 pm

    Thanks for the helpful guide! There are a lot of factors that go into filing taxes, but you break it down into easily digestible pieces.

    Reply
  11. Selene says

    May 2, 2017 at 4:15 pm

    Wow, awesome post! These are certainly some great questions to ask whoever may be doing your taxes, which should only be a certifies professional. Thanks for sharing!

    Reply
  12. andy robben says

    March 24, 2017 at 12:29 pm

    Thanks for the tips. it useful for me in future while hiring a tax preparer for my company, I have zero knowledge in tax preparer after reading this article I get some information. once again thanks for the article.
    andy robben would love you to read ..US TaxationMy Profile

    Reply
  13. Richard White says

    March 15, 2017 at 12:22 am

    Hello there, Dana, I want to congratulate you for sharing this kinda eyeopener information with us, not everyone knows what really a tax is. So that, your statistics is quietly helpful because it’s easy to understand and to follow.
    Richard White would love you to read ..How to Properly Find a BookkeeperMy Profile

    Reply
  14. Ruben Frost says

    March 8, 2017 at 8:41 pm

    Hi, Dana, I was really enjoyed reading your stats about taxes preparation. Honestly, I do really need this significant information so that I can able to answer the questions of someone. Thank you so much for the share.
    Ruben Frost would love you to read ..Benefits of Outsourcing Your Bookkeeping NeedsMy Profile

    Reply
  15. Brian says

    November 1, 2016 at 12:34 pm

    Great advice for anyone looking to hire a tax expert. It’s important to find someone who really knows what they are talking about and can break it down for you so you can understand too. Thanks for sharing!

    Reply
  16. Alice says

    September 9, 2016 at 7:05 am

    Great info regarding tax.All my doubts regarding tax are cleared after going through your blog.Now i am able to give advice on the tax matters.Thanks for posting!

    Reply
  17. Drew says

    June 28, 2016 at 1:44 pm

    Great questions to ask before hiring a tax preparer this season. You want to be sure that all hidden fees are taken care of before making that final decision.
    Drew would love you to read ..Managing Your Travel and Entertainment ExpensesMy Profile

    Reply
  18. Britanny says

    June 13, 2016 at 9:48 am

    Hey
    Its an amazing blog about tax. It is really important in any business. I will be a great help to me and my husband.

    Reply
  19. Britanny Stoner says

    June 6, 2016 at 10:47 am

    Hey
    Great share!!
    Here by I am also sharing some tips have a look:

    * Be sure to select a tax professional with the appropriate credentials. Enrolled Agents and CPA’s are licensed professionals, guided by a code of ethics set forth by the Internal Revenue Service. We are required to keep up with the constant changes in the tax code through continuing education and this is reported to the IRS.

    * Your tax practitioner should have a Practitioner Tax Identification Number and should sign all tax returns.

    * You should use someone who is going to be available all year round to answer questions that may come up. There are life changes that occur during the year that may affect your tax situation and you may need someone available to offer advice as necessary, or you may get a letter from the IRS that you may need help to respond to.
    Britanny Stoner would love you to read ..6 Tips for Startup SuccessMy Profile

    Reply
  20. Hazel Owens says

    April 15, 2016 at 1:18 pm

    I like your advice to ask what kinds of returns the tax planner prepares. Like you said, there can be certain circumstances, like self employment, that can make taxes more complicated. Hiring a professional can help you figure out exactly what you need to do to get the best returns. Thanks for the article.

    Reply
  21. Tara Allen says

    April 15, 2016 at 6:12 pm

    Hiring an income tax preparation service would be perfect in handling important responsibilities. I am glad to know that remembering your tax identification number can be a help when you go to get assistance on your taxes. Learning more about returns sounds like a good way to get the most back.

    Reply
  22. Drew says

    March 29, 2016 at 3:26 pm

    Great list of questions that you should be asking before hiring a CPA. You don’t want to rush into hiring just anybody so the more questions you can ask, the better feel you can get for the type of job they will do for you.
    Drew would love you to read ..Managing Your Travel and Entertainment ExpensesMy Profile

    Reply
  23. Kenneth Gladman says

    March 15, 2016 at 6:35 pm

    Preparing my taxes is a stressful experience. I have done them myself in the past, but it just isn’t a possibility anymore. I agree in finding a professional with experience. Great post.

    Reply
  24. VioletSullivan says

    January 18, 2016 at 8:52 pm

    I didn’t realize that a PTIN was required for a business accounting service to legally handle your taxes. I’ve been wondering what it would be like to start a business. I’ll definitely jot this down as a requirement to hire an accounting professional.

    Reply
  25. Olami says

    November 2, 2015 at 3:07 am

    what a great and wonderful post, its my first experience and first time reading this and i have full gasp on hiring a tax Preparer,

    Thanks alot

    Reply
  26. jamesrod214 says

    October 20, 2015 at 11:54 pm

    In my opinion, it’s a great idea to hire a CPA. I’ve done it in the past, and it helped me get more organized with all my finances. These are some great questions to consider before going into a meeting with one. I think that making sure that they back you up in an audit is a smart question to ask.

    Reply
  27. bryan flake says

    October 14, 2015 at 11:10 pm

    Silly though it may seem, I had no clue that a tax Preparer had to be registered with the IRS. This totally makes sense, though. I feel so much better about letting someone handle my finances, knowing that they went through a legal process to make sure that they are on the up and up with the ethics of handling others’ finances.

    Reply
  28. Veronika says

    October 7, 2015 at 10:46 pm

    Thank you for these tips, because I had no idea what to look for. You’d think I would know how to file my own taxes by now, but for the last 10 years I’ve been getting help from my mom. That’s really embarrassing to admit, but I really need to find someone good! Thanks for suggesting to find someone who will back you up if you get audited.

    Reply
    • Gail Gardner says

      October 8, 2015 at 3:35 am

      Hi Veronika,

      Don’t be embarrassed. Taxes are extremely complicated. If you have a business you may be better off hiring an expert. If you are an employee and file few forms. look into using one of the online programs that guide you through the process and help you find deductions. Try one of them out, and then if you’re uncertain you can save money having a preparer look the forms over.
      Gail Gardner would love you to read ..7 Most Important eCommerce Success Metrics #etailMy Profile

      Reply
  29. Correy Smith says

    October 1, 2015 at 9:49 pm

    If you’re a student and self employed how much in tax returns do you think should be returned to you? This is my current condition for this year and so far I’m kind of nervous about doing the tax return preparation. Mainly because it’s my first time and also a friend told me that it would be better for me to do this.

    Reply
  30. Emily Smith says

    July 29, 2015 at 4:43 pm

    Dana, taxes are a confusing process for many people, including me. There are so many different tax forms and options that it can be hard to keep track of. It is good to know that a 2290 is for those who are filing for many different individuals.

    Reply
  31. Gerald Vonberger says

    July 22, 2015 at 5:36 pm

    It’s really helpful to know what sorts of things you need to make sure are in line before hiring a tax professional. I didn’t know that they had to be registered with the IRS whether they’re an attorney, an accountant or agents. That sounds like a good way to make sure that they understand tax code and that they’ll be able to advise you on tax law matters adequately.

    Reply
  32. Richard Yaffee says

    July 9, 2015 at 1:18 pm

    Thanks I needed that information. This was exactly what I needed to read although this is a bit overwhelming…

    Reply
  33. Satish Ratna says

    June 19, 2015 at 6:55 am

    Super blog…thanks for sharing…its very interesting…
    i’m searching for this information from long time…thank you…please share some more interesting posts
    Satish Ratna would love you to read ..Hello world!My Profile

    Reply
  34. Jose says

    June 17, 2015 at 4:58 am

    Awesome collection, Really thanks for sharing Tax information…Actually i don’t no about the tax preparer… I think today i read great info in your blog…thank you.

    Reply

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