What To Ask When Choosing a Tax Advisor
“What’s Your Tax Background?”
First, define a tax preparer’s credibility by asking for professional credentials and background. Experience is key when it comes to taxes and year-round accounting services.
CERTIFICATIONS ARE CRITICAL WHEN IT COMES TO TAX AND ACCOUNTING. IT’S ALL ABOUT ACRONYMS:
CPA: A certified public accountant, or CPA, is certified to act as a public accountant. A CPA is the only licensed qualification in accounting and is granted after you pass an exam. CPAs can practice in other areas of accountancy besides taxes, too.
EA: An enrolled agent (EA), the highest credential awarded by the IRS, is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals. Only enrolled agents, attorneys, and CPAs may represent taxpayers before the IRS.
“How Do You Charge Clients?”
Accountants and tax preparers can charge in a variety of ways: by the hour, by the return, by the complexity of forms filed, or even a percentage of the total amount of your refund (a practice that is frowned upon). And with cloud-based accounting, you may have an upcharge to use the platform. While you might not get a hard number of the amount you will owe, establish the context of cost so you are not surprised down the road.
“How Do You File Taxes?”
Most individuals prefer e-filing a tax return, yet many tax preparers will mail them. Define the filing method they use with clients. (Generally, a paid tax preparer who files 11 or more tax returns is required to electronically file.)
Availability is important – not only within the working day, but also year round.
First ask: “What is your typical response time?” (Even in the heat of tax season.) Point blank: you may have a question that needs prompt attention, so choose an advisor who is available and quick to respond – preferably within 48-hours.
Then ask: “What is your availability year-round?” Even after taxes are filed, the IRS may need more information about your tax return, so the preparer should be available to you. On top of this, your taxes are just one part of your overall tax and financial picture, so it’s important to find an advisor who suits your needs throughout the year.
How to Choose a Tax Preparer for Truckers
Think – Who did your income taxes last year? Did they give you good service? Were you happy with the result? Did they even KNOW trucker taxes? Over a year ago, the TruckingOffice team made a commitment to go beyond simply providing the very best bookkeeping and record keeping services available. We began a search for the very best in other important services that all professional drivers need, like factoring, insurance and tax services.
The questions we asked ourselves in our search are the same ones that you should ask yourself if you happen to be searching for a new preparer:
Do they give prompt, attentive service?
Do they know trucker taxes inside and out?
Do they provide a great value for the fees charged?
Have they been around basically forever? Do they have a track record? Have they proven themselves?
And finally, are they fun and pleasant to deal with?
If filing your taxes is about as fun as a trip to the dentist, or if you answered “No” to even one of the questions above when you checked out another tax service,
Questions to Ask a Tax Preparer
When interviewing a prospective tax preparer, ask these questions:
Do you have an IRS issued Preparer Tax Identification Number (PTIN)?
Do you offer a free initial consultation?
How do you keep up with the latest tax law?
Do you regularly take continuing education courses?
Are you a member of any professional tax or accounting organizations?
What are your professional credentials?
Do you abide by a code of ethics?
How do you determine your fee to prepare my return(s)? Is it a fixed fee or an hourly rate? Is it based on a % of my refund?
Who will prepare my return? Will it be you or someone else in your office?
If you have employees who will work on my return, do they hold any credentials and do they take continuing education courses?
When do you require payment?
When can I expect to receive my completed tax returns back from you?
How long have you been in business?
Are you bonded or insured?
Do you outsource any tax preparation services?
What happens if I get audited?
Will you store my tax information? How will it be stored and for how long?
Can I contact you after tax season if needed regarding my return?
Enrolled Agents (EA) – People with this credential are licensed by the IRS and specifically trained in federal tax planning, preparation and representation. Enrolled agents hold the most expansive license IRS grants and must pass a suitability check, as well as a three-part exam. They complete 72 hours of continuing education every 3 years
Certified Public Accountants (CPA) – People with this credential are licensed by state boards of accountancy and have passed the CPA exam. They must meet education, experience, and good character requirements established by their boards of accountancy and comply with ethical requirements as well as complete continuing education to maintain an active license. CPAs can offer a range of services; some CPAs specialize in tax preparation and planning.
Attorneys – People with this credential are licensed by state courts or their designees, such as the state bar. Generally, requirements include completion of a degree in law, passage of an ethics and bar exam and on-going continuing education. Attorneys can offer a range of services; some attorneys specialize in tax preparation and planning
How to become a professional tax preparer
Create your PTIN
Anyone who prepares tax returns and charges a fee for their services is required to have a Preparer Tax Identification Number (PTIN) . There aren’t any educational requirements to get your PTIN. You can create one online on the IRS website. The process only takes about 15 minutes
Apply for an EFIN
If you plan to file tax returns electronically, the IRS requires that you have an Electronic Filing Identification Number or EFIN . You can complete your application quickly on the IRS website, here. You will also need to provide your fingerprints to the IRS unless you are already a certified licensed professional, like a CPA or attorney. It should take about 45 days to get your EFIN.
Register with your state
Every state is different. Depending on where you plan to work, you may or may not need to register as a tax preparer. Look up your state’s requirements before you begin accepting clients.
Work at an office
When you are just starting out as a tax preparer, you may find it helpful to work for an established tax prep service for a brief period. Not only will you be able to ask questions and gain experience during tax season, but you could also learn valuable lessons about the state and local requirements where you plan to start your business.
Choose a tax prep software
Every tax preparer is different. Depending on your level of experience in the industry, you may require certain things from your tax preparation software. Consider your needs first.
HOW TO CHOOSE THE RIGHT TAX PROFESSIONAL FOR YOU
How do you choose a professional?
For anything, really?
When you need legal or medical advice, an electrician, or a mechanic?
Do you take the phone book and choose a random entry?
Do you drive around stopping at the first place you find?
No. You shop around. You ask friends, family, and coworkers for recommendations. Never do you go in blindly. But most importantly, you ask questions! So why would you choose just anyone to hire to prepare your tax return? Why would you use a chain tax service where you don’t know a single thing about the person who will prepare your tax return? Many people already have a tax preparer they trust and have been working with for years.
You are the boss in this scenario, and the professional is working for you. You need to be the one who makes the decision to hire a particular person to prepare your income tax return.
You’ll even hear about a “friend of a friend” whose sister used this guy out of a back room without windows who got them a huge refund when they should have gotten peanuts.
Sadly, it’s hard to tell who is qualified, who is for real, who should be trusted with your income taxes. There isn’t a perfect way to find out about a person or company other than to ask around or check out reviews online.