For some people, annual taxes are easy to do on their own. But for those who have started a business, taken on freelance work or received unemployment benefits, it can be much more complicated. That’s where a qualified, local tax preparer can help.
However, finding a tax specialist isn’t always easy. Here’s how to start your search for tax help, and what you need to know before hiring a professional.
How to Start Searching for a Tax Preparer
One effective way to get started is to ask around. “Ask your friends or colleagues who are in similar situations to you,” says Kelly Phillips Erb, a tax attorney and tax writer.
Finding people in similar situations can help you get the specific type of tax help you need. “Maybe you’re all W-2 people, or maybe you’re a freelancer and you have lots of freelance friends. I would ask them who they use,” Phillips Erb says.
Another place to look is the IRS’s database of preparers, which allows you to find people with credentials and select qualifications.
What to Look For in a Tax Preparer
After gathering a few recommendations, you’ll want to do your own research. To ensure that the person you’ve been referred to is a verified preparer with the IRS, check that they have a Preparer Tax Identification Number, or PTIN, in the IRS’s database.
This database shows professionals in your area who hold a PTIN number, and either hold a verified credential or have completed the IRS’s annual filing season program. However, it doesn’t include all PTIN number holders.
It’s also good to ask about the person’s history of preparing taxes. “The main thing people want to look out for is their years of experience,” says Lisa Greene-Lewis, a certified public accountant and tax expert at TurboTax.
Qualifications can also be helpful in determining who’s a good fit to trust with your taxes, and will also show who’s been versed in this year’s tax information. “If they’re a CPA, in order to continue to keep their license, there are requirements for education,” Greene-Lewis says.
Enrolled agents can also be a good option. These individuals are authorized to represent taxpayers after passing a test on individual and business tax returns, or they were previously employed by the IRS.
“(Both CPAs and enrolled agents) should keep up with the current tax laws,” Greene-Lewis says. “They’re constantly changing. So definitely taking continuing education courses every year is a must.”
Interview Your Prospective Tax Professional
Once you’ve found a tax professional who you think might be a good fit, you’ll want to ask several questions, Phillips Erb says. “Give them a phone call or send an email and ask questions about their process.”
Your goal should be to establish a relationship with this potential tax preparer. “Somebody who is willing to build a relationship should be willing to chat with you about their process and how they work,” Phillips Erb says.
Not only can this help you establish a relationship, but it can also help you understand if you’re mutually a good fit. You’ll want to make sure that the preparer has experience working with situations like yours and is well-versed in things that might make your tax situation unique, such as international accounts or business income.
After giving your prospective tax preparer as much information as possible about your returns, ask them how they’re paid and how much your specific situation will cost.
Consider Free Tax Preparation Options
If you generally make less than $58,000, you might qualify for the IRS’s Volunteer Income Tax Assistance program, called VITA.
[READ: 15 Tax Questions Answered.]
What to Avoid In a Tax Preparer
Tax preparer scams aren’t new and they can happen. There are several common red flags to watch out for when considering who to choose to help do your taxes.
Make sure that the individual you’re considering has a PTIN number. From there, you’ll also want to make sure that they’re willing to list themselves on the form. “There are some preparers who will encourage folks to sign as self-prepared, even though the professional has prepared (the tax return),” Phillips Erb says.
You’ll want to make sure that the preparer you’re considering is available all year, not just during tax time. “The concern is: You file in April, but what happens during correspondence season when the IRS has a question in July, and you can’t reach them anymore?” Phillips Erb says.
Another red flag is a preparer who asks for a certain percentage of your return, Greene-Lewis says. “You don’t want to go to anyone who bases their fees on that.”
Remember to check your return, no matter who you decide to file with. “People are human and they make mistakes, but also you’re the person signing that return,” Phillips Erb says. “No matter how highly referred or touted somebody is, if they make a mistake, you’re ultimately the person on the hook for it.”
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Update 11/04/22: This story was previously published at an earlier date and has been updated with new information.