How to Choose a Tax Preparer



I believe that many people make a less than optimal decision in the choice of a tax preparation service. I would suggest that everyone ask these 3 questions before they select a professional.


What makes “you” qualified to prepare my taxes?  


The most important characteristics that correlate to an accurate tax return are: Experience, Education, Reputation and Credentials. I would choose someone with at least a bachelor’s degree in accounting or a finance related field and at least 5 years of experience. Your tax preparer should be a CPA or an Enrolled Agent. A CPA is an accountant and generally has a broad knowledge of many areas of accounting. An Enrolled Agent is more focused in the subject of tax and is tested directly by the IRS. Credentials for an Enrolled Agent could be National Association of Enrolled Agents and California Association of Enrolled Agents.


Experience, Education, Reputation and Credentials all directly effect the production of an Accurate Tax Return.


What is my final cost for all your services?


Amazingly one thing that does not seem to have a direct correlation with accurate tax preparation is price. I have seen countless new clients bring in high dollar tax returns from their previous preparers as I amend the return to make it correct. I would compare the pricing of tax preparation to the pricing of perfume. Some buyers want to pay a higher price for the panache of a big accounting firm. The Big Box Tax preparation firms charge the same high price for an Enrolled Agent with 10 years of experience or a trainee on their first day. That is why you must demand that an Enrolled Agent or a CPA prepare your taxes whether you decide to patronize the Big High Price Firms or your neighborhood business owner.


One thing that directly relates to the character of the business is transparency. Does the firm give out prices or is it a game where you end up being the loser after coming to their office for a high price quote. I appeal to you to get a firm price for your situation over the phone before coupons and new client discounts. Some firms will offer a low price for new clients and then ratchet up the price the following year. This is fine as long as the discount is transparent and you know what you will pay next year.


What services do I get for my money?


Your tax service must include all tax preparation, electronic filing and year round service for your preparation fee. Also if your preparer is a CPA or an Enrolled Agent they will be able to represent you before the IRS if there is a problem. Of course if you choose the right firm there is much less chance of inaccuracy and problems later.


It is also important to know that your information is safe. The tax practitioner should keep your data for 6 years in a highly secure environment. I keep all of my client’s data, double encrypted, offsite. This is probably more secure than most other firms. Just make sure your information is safe from prying eyes.


The last duty of your tax service should be to give you fast, friendly and appreciative service. This is an important part of the value of your tax preparation experience.