Top 10 Things To Look For In Your Tax Preparer

In this age of outsourcing the help we need, it’s good to know we can get a trained professional to file our taxes—whether it’s for personal or small business needs. However, choosing the right tax preparer is key. Here are ten things to look out for when you make that choice:

“Credentials, credentials, credentials”

1. Look for tax preparation qualifications.

You can choose from a Tax Attorney, a Certified Public Accountant (CPA)—both of whom are certified by their respective boards for tax help, Enrolled Agents (EA), Annual Filing Season Program (AFSP) practitioners and Unenrolled Return Preparers.

Whew! All those initials can seem a little daunting, and so let me put things simply, depending on the level of training each one has received, and the services they offer you.

A Tax Attorney is a lawyer who specializes in taxation law and is helpful for litigation cases or IRS examinations. Similarly, when you are in need of an Attorney, look for a CPA who focuses on tax matters or has specialized training in taxation.

Enrolling Agents specialize in taxation and go through tests and background checks, and are regulated by the IRS. AFSP practitioners have participated in an 18-hour continuing education program in tax return preparation.

And finally, Unenrolled Return Preparers are not tax help Maryland practitioners, but depending on the state, are allowed to prepare tax returns. These preparers are allowed to practice in Maryland if they are active registrants of the Maryland State Board of Individual Tax Preparers.

2. Does he or she have a PTIN? (Preparer Tax Identification Number)

Anyone you decide to work with is required to have this PTIN, which is an eight-digit number following the letter P. It’s part of a tax professional’s legal identification.

3. Check online reviews.

Do a Google search of their name and check out reviews on Yelp. Visit the Better Business Bureau’s website concerning your preparer’s history and license.

For lawyers and CPAs, check with Maryland’s bar association and board of accountancy. If your preparer is an enrolled agent, his or her records will be with the IRS Office of Enrollment. It’s called due diligence for a reason!

And it’s always good to be sure.

“No shady deals!”

4. Demand transparency when it comes to service fees.

Some preparers promise bigger refunds than others, and some actually base their fees on your refund. This is not the best. Better to set a service fee as well as a schedule of those fees from the beginning.

And, importantly, make sure than your refund goes into your bank account and not your preparers. Ask about this, and read the fine print…which bring us to the next item…

5. Make sure your preparer has an agreement contract for you to sign.

Before he or she starts working for you, your preparer needs to have you sign a contract that clearly states what’s expected of your preparer and when he or she needs to deliver, all included fees, and other obligations and limitations. Pro tip: Keep this contract on file for at least three years.

6. A good preparer asks for receipts.

If your preparer files your returns without asking for receipts and records from you, this should be a red flag. On your part, make sure you give him or her complete documentation.

“Hold that signature.”

7. Check everything before you sign…

Make sure you carefully check everything that your preparer wrote on your tax return before signing it. If anything is unclear, ask questions and get answers.

8. Be wary if you’re asked sign a blank tax return.

If your preparer asks you to sign a blank tax return it’s a sure sign of trouble. The IRS has mechanisms for reporting shady practices, and don’t be afraid to use those mechanisms.

“A good preparer earns your trust.”

9. A reputable preparer is always available.

A reputable preparer is available even after tax season. You may have some questions after April 15, and you should be able to contact your preparer to get your questions answered.

10. All your questions are answered.

A good preparer knows tax help Maryland’s state taxation laws and is able to answer all your questions fully and to your satisfaction. In other words, you feel safe.