Finding Your Tax Preparer

The end of the calendar year rings in the beginning of the next tax season. During the months of January and February, most taxpayers will be receiving their tax documents from their employers and government agencies, (W-2, 1099s, Healthcare Marketplace, ect.). When receiving all this information, many people become confused and don’t know how to go about dealing with the information they receive. Or, they choose to simply hand the work over to someone else because they don’t feel like doing it no matter how simple or complicated the work is.

By now, most people have already decided whether they want to do their taxes on their own or already pay someone to do them. However, if you’re still looking for someone to take care of your work, or you’re simply getting too confused with the tax law to continue doing your own tax return, then you’re probably on the prowl for a trusted professional to take care of your taxes.

There are many options when it comes to figuring out who should do your tax returns. The most important thing though, is finding someone you can trust; not only to prepare your return correctly, but to keep your information confidential and safely secured as well. The three main professions that prepare tax returns are Certified Public Accountants (CPAs), Enrolled Agents (EAs), and accountants.

CPAs are highly regarded professionals who are certified by the American Institute of CPAs (AICPA). The AICPA is in charge of regulating the codes by which CPAs work. They also administer the four part exam that a person must pass. The CPA exam is considered the hardest professional exam with a less than 50% pass rate.

EAs are tax preparers  who have earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. So yes, if you hire an EA there is a chance that they were an IRS agent. The EA profession is still a growing one seeing as most people have never heard of them before.

Accountants are accountants. They have earned an Accounting degree from some four-year college and are working for an accounting or CPA firm and preparing tax returns.

All of these, as well as many other kinds of people are tax preparers. There are also millions of people who prepare tax returns who have no designation whatsoever; which is perfectly legal provided that they register with the IRS.

So when choosing your tax professional, take into mind their designations, the degrees and licenses in their offices, and recommendations from friends and family. Find someone you think you can trust then ask all the questions you want. Make sure that whomever you choose is the right choice for you.

Until then, friends.