Now that tax season for filing 2023 taxes is upon us, you may be eager to get federal and state income taxes filed and put that stressful year behind you. Whether you think you’ll owe taxes or expect a fat refund, hiring a qualified tax preparer can help ensure that your income taxes are properly prepared by an expert.
Keep in mind, however, that not all tax preparers are equal in skill, training, qualifications, and representation capabilities if you run into trouble with the IRS over your taxes.
1. Do you have a Preparer Tax Identification Number?
Anyone who prepares or assists in preparing taxes for compensation is required by the IRS to have a valid preparer tax identification number (PTIN). If the tax preparer you’re considering hiring has a PTIN, great. If they don’t, continue searching for a preparer who meets this requirement.
When you are ready to hire, look up the tax preparer by zip code and last name on the IRS Directory of Federal Tax Preparers to make sure they have a PTIN, since the IRS directory contains only tax preparers who have a PTIN.
2. What are your credentials?
When choosing a tax preparer, the PTIN alone doesn’t guarantee that a certain type of preparer is the best choice for your tax filing needs. There are important differences among tax professionals when it comes to “representation rights” – the tax preparer’s ability to represent their clients on matters related to audits, payment, and collection issues and appeals.
3. Are you a member of a professional association?
A tax preparer doesn’t have to be a member of a relevant professional association to be credible. However, membership in a professional association typically requires the member to adhere to standards of practice and a code of ethics, which acts as a safeguard against hiring someone who is unqualified, incompetent, or employs questionable practices.
4. Do you meet state requirements?
Search online for your state’s requirements for tax preparers and make sure any tax preparer you hire meets all state licensing, registration and continuing education requirements.
5. Do you pursue continuing education?
Tax laws are complex, and competent tax preparers know they need to stay on top of tax laws and other tax topics. Ask a potential tax preparer what kinds of continuing education courses he or she completes each year so you can gauge their skill and qualifications. Search tax professional association websites for more information on recommended continuing education courses.
6. Which records and receipts will you need?
Good tax preparers ask for receipts and records to back up the facts and figures they provide. “They’ll also ask questions to determine the client’s total income, deductions, tax credits, and other items,” says the IRS. “Do not hire a preparer who e-files a tax return using a pay stub instead of a Form W-2. This is against IRS e-file rules.”
7. Are you available year-round?
The IRS recommends using a tax preparer who is available year-round rather than someone who works only or mainly during the tax season. That way, if any questions or concerns over your past taxes arise, you can easily contact the preparer.
