Hiring a Tax Professional
It's easy enough to gather up all the necessary paperwork and hand them off to a qualified tax preparer. If you have had any major purchases, life changes, investment transactions, incomplete records or potential audit, a tax professional can be an invaluable source of service and information. But before you pay someone to prepare your tax return, make sure you choose carefully. Remember, you're ultimately responsible for the accuracy of your tax return, even if someone else prepares it.
Determining which type of tax preparer would work best for your particular situation requires a little research. To get started, you first need to have an idea of the types of tax professionals available:
Certified public accountants
To become a CPA, accountants must pass an exam that qualifies them to practice in a particular state. You may consider using a CPA if you've recently had a major life change, like getting married or divorced, retiring, or any other experience that significantly impacts your financial situation. It's also important to keep in mind that a CPA may legally represent you if you have any need to communicate on your behalf with the IRS. Don't assume, however, that because CPAs are experts in accounting practices that they are always tax experts. Be sure to ask any prospective CPA about their general experience with taxes, as well as whether or not they stays informed about current tax law.
Chain or local outlet tax preparers
Chain or local outlet tax preparers do receive some training, but don't count on their tax expertise to be extensive. If you have a fairly basic tax return to prepare, but would just like someone to guide you through the process, this may be an inexpensive option to consider.
Enrolled agents
An enrolled agent has either passed a comprehensive IRS exam, or was once an IRS employee, and is licensed to practice by the federal government. These agents sometimes specialize in a specific taxation field, so it's important to ask an agent if their specialization will work for you.
Tax attorneys
For most people filing a basic tax return, a tax attorney just isn't necessary. You may consider using a tax attorney if you need specific advice on the latest tax laws, or if your financial situation is very complex.
Keep in mind that no matter what type of tax professional you choose, they should be able to electronically file, or e-file, your tax returns. This guarantees the IRS will receive your file on time, and you will be provided with an invoice immediately for your personal records.
But while hiring a tax professional can be both convenient and less stressful than preparing your own returns, their services may just be out of your price range. If your taxes aren't that complicated, filing you own tax returns may be the better solution.
