The 2023 tax filing season officially begins this week. For many people, significant life changes, business ownership, or simply a lack of knowledge about the ever-changing tax laws make finding a trustworthy tax preparer a good idea. That said, not all tax preparers have the same level of experience and training. The Better Business Bureau (BBB) has tips for finding someone you can trust with your finances and sensitive personal information.
Which type of tax preparer is right for you?
First, it’s important to understand the different types of tax preparers and their qualifications. Only enrolled agents, certified public accounts, and attorneys may represent clients to the IRS on audits, collection issues, and appeals.
Enrolled Agent (EA): An EA is a tax preparer approved by the IRS to represent taxpayers. An EA must either have prior qualifying employment with the IRS or pass an intensive two-day exam on federal taxation and complete a background check. To maintain EA status, they must complete a specified number of credit hours each year of continuing education in accounting methods and tax regulations. An EA may work independently or as part of a firm and specialize in specific areas of tax law.
An EA is a good option if you have a more complex tax situation. However, you’ll want to make sure their area of expertise applies to your situation. Fees and availability may vary, but you can expect an EA to charge less than a CPA. An EA is also qualified to help you with financial planning and give you tips that could help you reduce your taxes in the future.
Certified Public Accountants (CPA): CPAs have a college degree (or the equivalent in work experience). They are licensed after passing a state professional qualifying exam. They are highly skilled in accounting. This makes them good candidates for complex tax planning and preparation if they are experienced in handling tax matters and enrolled in continuing education programs that keep them abreast of the constant changes to tax laws. If your return is quite complex, a CPA may be your best choice for tax preparation, but keep in mind they will charge much more than basic tax preparers.
Attorneys: Tax attorneys often charge the highest fees as tax preparers. Hiring a tax attorney is a good option for taxpayers looking to legally shelter part of their income or those needing specialized advice on municipal bonds, estate planning, and the like...Read more
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