Navigating tax season can be stressful, but a trustworthy tax preparer can help. Here’s a guide to choosing the right professional and avoiding problems.

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1. Do You Need a Tax Preparer?

• Simple Returns: If you have a straightforward 1040 without deductions, you may be able to file on your own or use free assistance programs.
• Complex Situations: Consider hiring a professional if you’re self-employed, own a business, or have unique financial events like stock trading, cryptocurrency, or inheritance.

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2. Types of Tax Preparers

Credentials to Look For

• Preparer Tax Identification Number (PTIN): The minimum requirement to prepare taxes. These preparers can't represent you before the IRS unless they prepared your filing before 2015.
• IRS Annual Filing Season Program Participants: Non-credentialed preparers with continuing education and limited IRS representation rights.
• Certified Professionals:
• Certified Public Accountants (CPA): Ideal for complex tax and financial planning.
• Enrolled Agents (EA): Experts in federal tax law, great for complex returns and audits.
• Tax Attorneys: Best for legal or intricate tax matters.

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3. Where to Find Tax Preparers

• IRS Directory: Find Federal Tax Return Preparers.
• Professional Organizations:
• CPA: American Institute of Certified Public Accountants (AICPA).
• EA: National Association of Enrolled Agents.

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4. Questions to Ask Before Hiring

1. Availability

• Is the preparer’s office open year-roundTax issues can arise outside of filing season.

2. Pricing

• Ask for a quote based on last year’s forms to understand costs.
• Average fees:
• $220 for a basic non-itemized 1040 federal and state return.
• $323 for an itemized return (Schedule A).

3. Experience and Expertise

• How many years have they been preparing taxes
• Are they experienced with returns like yours (e.g., small business, investments, cryptocurrency)

4. Additional Services

• Can they represent you in case of an IRS audit
• Will they handle amendments or follow-ups if errors occur

5. E-Filing

• Ensure the preparer offers IRS e-filing, which is required for those preparing more than 10 returns.

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5. Warning Signs to Avoid

1. Fee Structure

• Avoid preparers who base fees on a percentage of your refund. This can incentivize unethical practices.

2. Complaints

• Check for complaints with the Better Business Bureau.

3. Ghost Preparers

• Avoid preparers who won’t sign your return or provide their PTIN. This is illegal and a major red flag.

4. Signing Blank Returns

• Never sign a blank or incomplete tax return.

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6. Rights and Responsibilities

• Errors by Preparers:
• You’re responsible for paying additional taxes due to mistakes.
• You can appeal to the IRS to reduce penalties if the error was not your fault.

• Some preparers or firms (e.g., H&R Block) may offer guarantees or cover added costs if they’re at fault.

• Review Contracts:

• Understand your preparer’s responsibilities, especially regarding audits and amendments.

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By following these tips, you’ll be well-prepared to find a tax preparer who’s both reliable and a good fit for your needs.

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