As we head into the tax season, you don’t want to delay looking for a tax professional. However, selecting the first preparer you find isn’t a smart move either.
“It’s important to connect with the right tax professional from the beginning,” says Steven Janssen, tax director with financial firm CBIZ MHM in Tampa Bay, Florida. The best tax preparers do more than fill out forms. They may be able to identify areas of potential savings, assist in the event of an audit and provide year-round guidance and support.
Many people wonder: How do I find a good tax professional near me? To start, follow these steps:
1. Understand your tax preparation needs.
2. Check with your network for referrals.
3. Confirm credentials.
4. Ask for an interview.
5. Compare fees.
6. Look for red flags.
[SEE: Every Tax Deadline You Need to Know.]
1. Understand Your Tax Preparation Needs
The first step to finding the best tax professional is to identify what services you need. Some people have basic tax returns while others may require a preparer who can handle complex tax situations and be available for consultation throughout the year.
“For many people, an H&R Block is a good option,” says Benjamin Bohlmann, tax partner in the Miami office of accounting firm Friedman LLP. Chain tax preparation companies often have low-cost service that meets the needs of taxpayers with simple returns. “They’re fine and do good work, but it’s not a relationship,” Bolhmann says.
Those who want personalized advice or have complex finances may want to look for a CPA, otherwise known as a certified public accountant. Enrolled agents and some attorneys are also qualified to do this work.
Being a CPA is no guarantee that someone is well-suited to manage your taxes, though. Just as medical professionals specialize, so too do finance professionals. Many CPAs focus primarily on audits, and those who do choose a career in tax may concentrate on a specific area such as individual, commercial or real estate taxes. Likewise, non-CPA tax preparers may have expertise in some types of returns and not others.
2. Check With Your Network for Referrals
Once you understand the scope of service required, it’s time to begin searching. The best way to start is by tapping into your personal network.
“It never hurts to ask family and friends,” says Michael Landsberg, CPA and principal in the Atlanta office of Homrich Berg Wealth Management.
A trusted attorney or insurance agent may also have connections with experienced tax professionals. And you can talk to workers in a similar field or business owners in the same industry as you. This method is more time-consuming than going to a search engine and typing “tax services near me,” but it can help ensure you are matched to a professional who is able to expertly handle your tax returns.
If your network doesn’t have any suitable leads, a web search may be your next best option. “That’s a little more risky because you aren’t sure what you’re going to get,” Bohlmann says. A good place to look for qualified preparers is on your state’s CPA association website, assuming they have a searchable membership directory.
[READ: Tax Prep Checklist: Collect These Forms Before Filing Your Taxes.]
3. Confirm Credentials
At the very least, someone who is being paid to prepare taxes needs a preparer tax identification number — or PTIN — to file taxes with the IRS. However, almost anyone can receive a PTIN, and it is no guarantee that a preparer is good at their job or offers the services you need.
“There are tax preparers and there are tax professionals,” Janssen says. Preparers, such as workers found at tax preparation chains like Jackson Hewitt and Liberty Tax, may be able to handle simple tax returns, but they aren’t necessarily trained to provide in-depth tax guidance.
For more complex returns or for help with tax-minimizing strategies, look for an enrolled agent, CPA or tax attorney.
4. Ask for an Interview
You can learn a lot from online reviews, but nothing replaces a personal conversation. This is particularly important if you’re looking for someone to partner with you for the long term.
“If someone is doing your taxes, you want to have complete trust in them,” Landsberg says.
Tax time is busy so don’t expect a long conversation, but ask for a five- to 10-minute phone call at least. Then, get the following information if it is not readily available on the preparer’s or professional’s website:
— How is data kept secure?
— Do you charge a flat fee per form or an hourly rate?
— How many returns do you complete a year?
— Do you prepare all your own returns or do you have staff that assist?
— Do you file returns electronically?
With some exceptions, the IRS requires tax preparers to file electronically if they submit 11 or more returns a year. That means preparers who use paper returns may be doing taxes on a very part-time basis and that could be a sign to keep looking, no matter how impeccable a person’s credentials may be.
In large accounting firms, there may be many employees who could conceivably be working on your tax return, from CPAs to junior staff members. “You want to be at the right place within the firm,” Bohlmann says, so be sure you understand how work on your return will be delegated.
5. Compare Fees
While you don’t want to select a tax professional based on price alone, it pays to compare quotes from several providers, especially if you are using a tax preparation service for the first time. Some preparers may charge an hourly rate, but it is also common for fees to be based on the forms and schedules to be filed.
“You have no idea if $1,000 for a regular 1040 is reasonable or not,” Landsberg says, “and the answer is that it’s not.” However, someone who hasn’t compared prices may not realize that.
For 2020-2021, the average fee charged by firms for a 1040 tax form without itemization was $220, according to a fee survey by the National Society of Accountants. With itemization, the average cost rose to $323. Self-employed workers paid an average of $192 to have their Schedule C form prepared.
Individuals with very simple returns — such as income reported on a W-2 and no investments — may be able to save money on tax preparation by doing their own filings. “(Tax) software can do a good job for vanilla situations,” Landsberg says in reference to basic returns.
[Read: What’s My Tax Bracket?]
6. Look for Red Flags
Not everyone who claims to be a tax preparer is legitimate. The following red flags could mean someone is incompetent at best or a criminal at worst.
Promises of an amazing return. As with much in life, if it sounds too good to be true, it probably is. Unless your income, family situation or the tax law has changed significantly, your tax refund should be similar from year to year. Be wary of anyone who says they can get you a refund far in excess of anything you’ve received in the past. “If someone promises you a refund, don’t walk, run away,” Bohlmann says.
Refusal to sign a return. “If you prepare a return, you have to sign it,” Janssen says. It’s the law. Beware of anyone who refuses to sign a return, and don’t include your signature until you see your preparer add his or her name first.
A temporary office or missing website. While some independent tax preparers work out of their homes, be careful about hiring someone who doesn’t seem to have any permanent business presence. Should you be audited or have a question about your return later, you want to be assured the preparer will be easy to find.
Charging a fee based on your refund. Legitimate tax preparers will charge either an hourly or flat fee for their work. Assessing a charge based on the size of your refund is a violation of professional ethics, according to Janssen.
A bad feeling. Finally, don’t overlook your intuition. If something about a tax preparer doesn’t feel right, keep looking, Landsberg suggests. For instance, if a preparer doesn’t seem to understand your questions or tax situation, that can be a sure sign they are not the right person to complete your return.
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How to Choose the Right Tax Professional originally appeared on usnews.com
Update 02/01/22: This story was previously published at an earlier date and has been updated with new information.
