Consult A Tax Professional For Complicated Tax Situations

There are many types of tax professionals available that offer different levels and types of services. A certified public accountant (CPA) is a financial professional with significant training and very often a degree in accountancy. In addition to their educational training, CPAs must also pass a state-exam before being permitted to practice. Many CPAs also belong to professional organizations that also require them to pass a specific level of tests and exams or take specific courses.

A tax attorney is usually employed by those with extremely complicated financial and tax needs (corporations, the wealthy, etc.) and mainly work in an advisory role, consulting with tax preparers rather than filling out the tax returns themselves. Tax attorneys are law school graduates who have passed the bar exam, so the rates they charge are usually the highest among all tax professionals.

An enrolled agent is a tax preparer that has received extensive testing by the IRS and is equipped to handle the tax issues of those with a relatively complex tax return. EAs are permitted to accompany you to an IRS audit. Because their main focus is tax and tax laws, their fees are close to but not in excess of a typical CPA.

A certified financial planer typically works closely with a set of clients so they can be helpful in filing taxes or explaining complicated tax procedures, even though they do not have the same education and training as a CPA. A certified financial planner should possess a license and accreditation from the Certified Financial Planners Board of Standards.

Finally, a tax preparer has the least training of all of the tax preparers and is not required to be licensed. Tax preparers include those working at well-known tax preparation firms such as H&R Block, Jackson Hewitt and others. A tax preparer can assist individuals with simple returns and perhaps help them find deductions but, as stated previously, their knowledge in these areas may be limited. While their rates are the lowest of all the tax preparers, those needing extensive tax help should probably seek help elsewhere.

Whichever type of tax preparer you select to help you with your federal taxes, you should keep several things in mind:

Carefully review the tax prepares credentials, education (if applicable) and qualifications. Find out what their experience is in the areas in which you need tax help. Check to see if your tax preparer is a member of any CPA organizations, state boards or bar organizations. In addition, check their status with the Better Business Bureau. It is important to verify the qualifications of your tax preparer because even thought they are required to sign the completed federal tax form, it is the taxpayer who is responsible for the information contained within. Any errors on the part of the tax preparer, you will have to answer for. In addition, a qualified tax preparer will be able to find deductions and credits that can reduce the amount you owe, which should be incentive enough for you to find a qualified preparer.

Depending on the level of expertise of your tax preparer, you may either pay a flat fee or be charged on an hourly basis. In addition, some tax preparers may charge based on the amount of your refund, while other may claim to be able to get you a refund that far exceeds anything any other tax preparers have promised. Be wary.  These preparers may resort to filing practices that benefit them more than you. Discuss how payment will be charged up front to avoid any surprises.

Don’t be afraid to interview your tax preparer before giving them your business. Talk to at least five tax preparers before selecting one and try to meet all of the candidates in person. Have questions about your specific problems and concerns ready and make sure you get satisfactory answers. In addition, a qualified tax preparer will have questions of their own for you as well, to get a better understanding of your particular situation. Make sure the tax preparer will be available for your calls and having a tax preparer that is available in the case of an audit is also helpful.

A professional tax preparer can help you avoid the pitfalls of the federal tax preparation process. For taxpayers with complicated tax situations and little knowledge of the tax system, getting the help of a professional is a must.