Maybe you’ve worked with a tax preparer before, but did you ever ask them about their credentials?
Many people don’t, even though tax advisors have access to information about your most personal details, including your bank accounts, your marriage, your kids — and your Social Security number.
Aside from vetting a tax preparer, there are some other considerations to keep in mind when looking for tax help. Here are seven tips on how to find the best tax preparer or tax advisor for you.
Ask for a Preparer Tax Identification Number (PTIN)
The IRS requires anyone who prepares or assists in preparing federal tax returns for compensation to have a PTIN. Note the phrase “for compensation” — volunteer tax preparers don’t need PTINs. Make sure your income tax preparer puts his or her PTIN number on your return — the IRS requires that, too.
Require a CPA, law license or enrolled agent designation
A PTIN is relatively easy to get, so go a step further and get a credentialed preparer — someone who’s also a CPA, certified public accountant, licensed attorney, EA, enrolled agent, or who has completed the IRS’s Annual Filing Season program. The Accredited Business Accountant/Advisor and Accredited Tax Preparer are examples of programs that help preparers fulfill the Annual Filing Season Program requirement. These credentials all require varying amounts of study, exams and ongoing education.
Look for friends in high places
Membership in a professional organization such as the National Association of Tax Professionals, the National Association of Enrolled Agents, the American Institute of Certified Public Accountants, or the American Academy of Attorney CPAs is always a good thing to have in a tax advisor, as most have codes of ethics, professional conduct requirements and various certification programs. If you already work with a financial advisor, their firm may be able to easily connect you with a tax advisor.