Hiring a Tax Preparer? Don’t Proceed Without Asking These 7 Questions First

Navigating the complex world of tax filing is a major challenge for small businesses. With so many obligations, many business owners choose to hire a tax preparer to file for them.

However, it is important you choose your tax preparer wisely. Your preparer will gain access to very sensitive information about your business and its finances. You need to make sure you are only working with highly-experienced and competent professionals.

These 7 questions will help you determine if your tax preparer is legitimate and effective and ensure you receive nothing but the highest level of service.

For more information on accounting and tax specialists visit: https://www.gudorftaxgroup.com/services/payroll-services/

Hiring a Tax Preparer? Don’t Proceed Without Asking These 7 Questions First - tax return image

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What is Your Preparer Tax Identification Number (PTIN)?

The first question you need the answer to should be “is this person legitimate?” Well, asking for their PTIN number is doing just that.

Any professional who prepares tax returns should be accredited by the IRS. This means they will have a valid PTIN number. You can check the official IRS PTIN registry here and confirm your tax preparer has a valid PTIN number and is legally allowed to file someone else’s tax returns.

What Experience do You Have with Similar Tax Situations?

Your tax situation is unique to you. For someone that has not dealt with a similar situation before it could be a lot of work. Find out what similar tax cases your preparer has handled in the past and their previous tax-filing experience.

What Qualifications do you Have?

While formal training isn’t essential for becoming a tax preparer, the best ones have some qualifications and professional education. Look for those with a certified public accountant (CPA) qualification, a certified financial planner (CFP) qualification, or those who have completed the IRS’ Annual Filing Season Program (AFSP).

Do You Belong to a Professional Association?

Most professional associations require the preparer to behave in accordance with the group’s code of conduct and set of ethics. If they are linked to a professional association, it could be an indication that they work to the very best standards of practice.

What Records and Documents Will you Need from Me?

Any reputable tax preparer will ask you to provide documents which detail a thorough record of your income and expenses. They should also be able to effectively explain what special schedules and tax circumstances you could qualify for, as well as the requirements for those.

If your planner doesn’t mention any special circumstances or ask any questions regarding your current circumstances to determine what you may qualify for, it could be a red flag that they are not willing to do work required to secure you the best tax rate.

Can You File My Returns Electronically?

Not all preparers are authorized to file electronically. However, it is in your interests to find one that can. It saves time on acceptance and allows you to secure your refund (if you are deemed to deserve one) far faster than through paper returns. The IRS website has a database of all the preparers authorized to file electronically. You can check to see if your preparer is listed there.

How do You Determine Your Fees?

Before you can proceed, you need to know the fee structure. Most preparers charge by the hour but should be able to give a rough estimate of how much the total project will cost.