How to Find a Reliable Tax Preparer

On February 16, 2025 By newsroom Topic: Taxes

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.

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.

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.

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.

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.

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.

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.

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.