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Hiring a Tax Pro – Three Essential Steps

There are many types of tax professionals who can help you. But choosing the appropriate type of tax preparer is just easy part. The hard part is finding the best person to handle the job.

If you’re planning to enlist the help of a professional tax preparer for the first time, or you want a new tax preparer because you’re not happy with your current preparer, these five steps will guide you:

1. Get referrals.

Ask people for recommendations – surely, your friends, family and colleagues will have worked with a tax preparer themselves. If you are new in the area, ask for referrals from with the CPA society in your state, explore the Accreditation Council’s website, or use the National Association of Enrolled Agents’ enrolled agent search tool.

2. Interview potential agents.

Even in their busiest, tax preparers will usually be able to give 20 to 30 minutes of their time for a phone interview. If they can’t give you that, or if they will charge you for the initial interview, find someone else.

During the interview, you should be able to cover the following:

Experience

You’ll want a tax professional who has been in this line of work long enough to take care of IRS problems and other tax-related issues.

Credentials

You should only work with a Certified Public Accountant, an Accredited Tax Adviser or an Enrolled Agent. And remember that only a CPA can have the designation, Personal Financial Specialist. Verify with your state’s licensing board and professional associations to make sure the candidate is licensed and is in good standing with no no disciplinary records.

Specialty

This can be a crucial point if you have specific needs. So if you own a small business, for example, you need a tax preparer with in-depth knowledge in business accounting. Or if you rent out properties as your business, look for somebody who has a lot of experience handling such tax situation.

Fees

Know if the tax preparer you’re considering charges a flat or hourly rate, and whether that fee will be good for everything or there will be additional charges for planning meetings and calls over the entire year.

Single Practitioner vs. Firm

If you’re planning to hire a preparer who is part of a firm, see if they will go over your returns after the associate has worked on them.

IRS Representation

Ask your prospective tax preparer if they will handle IRS issues. If not, find another prospect. You sure want someone who can and will come to your defense when needed.

3. Be sensitive to red flags.

Don’t work with anyone who suggests cheating the IRS for your benefit. And lastly, don’t hire them if they want to be paid through a portion of your refund. Tax preparers should be paid a flat or hourly fee, period.

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