What to Look for in a Tax Preparer

You expect your preparer to be skilled in tax preparation and to accurately file your income tax return. You trust him or her with your most personal information. They know about your marriage, your income, children and social security numbers – the details of your financial life, so it’s important to trust the person you hire to prepare your taxes.

There are various types of tax return preparers, including certified public accountants, enrolled agents, attorneys, and others who don’t have professional credentials. There currently aren’t licensing requirements so really anyone can prepare taxes. Choose your tax return preparer wisely. Ultimately, the taxpayer is responsible for all the information on their income tax return. This is true no matter who prepares the return on their behalf. Here are some tips:

Check Their History

Use a Google search to find online reviews of your tax preparer. You can also check with Yelp and the BBB. Check for disciplinary actions and the license status for credentialed preparers.

Knowledge of Tax Law Changes

The rules for tax deductions and credits have changed substantially. With the Cares Act and the new Covid Relief Bill, it’s critical that your tax preparer understand the changes and how the complexities affect your taxes. Ensure that your tax preparer is knowledgeable with the new tax law changes.

Ask About Fees

Avoid preparers who base their fees on a percentage of the refund or those who promise large refunds. Steer clear of refund anticipation loans, which often charge a high commission.

Ask to E-file

Taxpayers should make sure their preparer offers IRS e-filing. Paid preparers who prepare taxes for more than 10 clients generally must file electronically. The IRS has safely processed billions of e-filed tax returns.

Make Sure the Preparer is Available

You may need to contact your tax preparer after the filing deadline. Ideally, you want a tax preparer who is available year-round.

Review Before Signing

Before signing a tax return, ask to review it. Ask questions if something is not clear to you. You should feel comfortable with the accuracy of your return before signing it. You should also make sure that your refund goes directly to you and not to the preparer’s bank account.

Ensure the Preparer Signs and Includes Their PTIN

All paid tax preparers must have a Preparer Tax Identification Number (PTIN). By law, paid preparers must sign returns and include their PTIN. If your preparer is not willing to sign your return, then you should be alarmed so proceed with caution. The best way to avoid an IRS audit is to be certain that your tax return is prepared correctly.

Check with your tax preparer if you are unsure of anything mentioned. If you don’t have one or are looking for a new accountant, contact me for a consultation. My name is Noel Lorenzana, I’m an Illinois licensed, Registered Certified Public Accountant, specializing in taxes.

Disclaimer: Any accounting, business or tax advice contained in this article, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, I would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.

Scroll to Top