The tax code is over 4,000 pages long. Unless you plan to read each page and understand the tax code, you’ll want to have someone on your side who is a tax expert.
If you want to find the best accountant in your local area, you’ll need to know how accountants work. That will ensure that you get the right accountant to manage your taxes and make sure you’re not in trouble with the IRS and state tax authorities.
Read on to learn how you can hire the best tax preparer in your area.
What Type of Accountant Do You Need?
Not all accountants are the same. Some have different qualifications, levels of expertise, and designations.
You’re probably familiar with the terms CPA and accountant. Most people think that those terms refer to someone who can handle taxes. That’s true to a certain extent.
The fact is that there are major differences between an accountant and a CPA. A CPA is a designation that means they are a Certified Public Accountant. They have gone through the rigorous process to become certified including exams and continuing education.
They also are governed by the American Institute of Certified Public Accountants and the accounting board in your state. This ensures that your CPA operates according to the law and ethical standards set by these organizations.
An accountant is a person who went to school for accounting and understands some tax laws and most accounting principles. They can provide advice and prepare your taxes. They cannot file your taxes on your behalf.
As you start looking for accountants and CPAs, you may see that some call themselves IRS enrolled agents. An enrolled agent is either a former IRS employee or a CPA that passed a difficult IRS exam.
IRS enrolled agents can represent you if there are any issues with the IRS. This is extremely helpful because they can call the IRS on your behalf to resolve challenging issues.
You can verify the credentials of accountants and CPAs by asking for their PTIN. This is a Preparer Tax Identification Number, which is assigned by the IRS. You can also check a tax preparer’s credentials with your state board of accounting.
Make Sure They Use e-File
All tax preparers that handle more than 10 returns have to file their returns using e-File. This is the IRS’ system for filing electronically.
If the person you’re considering doing your taxes doesn’t use e-File, then it’s a sign that they’re not working on that many tax returns. They may not have the experience to handle your return.
How Do They Handle Back Taxes?
Your tax situation may be delicate because of old financial issues, or you did your taxes according to what you read on the internet. In both cases, you could wind up in a situation where you owe back taxes.
For example, if you lived abroad for a period of time, you may not have filed taxes for those years thinking that you didn’t need to. The truth is that all U.S. citizens have to file taxes, even if they live full-time in another country.
Another example is if you had significant financial hardship and you weren’t able to pay your taxes owed. That can lead to liens or levies on your bank accounts or property.
You’ll need to ask accountants how they handle these situations. The best CPA will know how you can reduce back taxes owed and get your financial footing again.
Understand Their Pricing
Accountants have different pricing structures that you need to know about. Some accountants and CPAs will use a flat pricing structure to do your taxes. This is usually for people that have a straightforward tax return and file a 1040-EZ form.
Accountants that have a broad range of clients find it easier to charge by the number of forms completed on a tax return. This is to ensure the tax preparer is paid according to the amount of work performed.
You’ll want to understand how much an accountant will cost. If they can’t give you a flat fee, then ask for a ballpark estimate for their services. You can then compare prices with others to find an affordable accountant in your area.
Support Beyond Tax Season
Sure, some might have summer hours, but that’s reasonable when you consider the long hours they work at other times of the year. You want to make sure that if you have questions or concerns outside of tax season, you can rely on their expertise and ask them.
For example, if you start a new business or have a major life change, you’ll need to understand how that change impacts your personal tax liability.
Interview Potential Accountants
Remember that the accountant may have the expertise, but you still have the power of choice. You don’t need to settle on an accountant that you don’t think is a good fit.
Part of that empowerment comes from knowing what questions you should ask potential accountants. You may want to take the opportunity to visit their office to see how they work.
You can get a sense of how organized they are and how they handle the massive amount of documents that go with the territory. Here are some questions you can ask in the interview.
Do you have any specializations?
Do you handle my tax returns or are they outsourced?
How do you keep my information secure?
Do you provide advice that will help me reduce my overall taxes?
These questions will give you a better understanding as to how an accountant works and how you can find the right accountant in your area.
Hire the Best Accountant in Your Area
How can you make sure that you hire the best accountant in your area? You want to make sure that you hire an accountant with the right credentials and experience to meet your needs.
This article showed you the steps to take to ensure that you hire the right accountant in your area. The best thing you can do is to take the time to research and ask questions.
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