How to Select The Best Tax Preparer

Tax time is stressful for most everyone. Whether you have a modest tax prep, are expecting a significant refund, or dreading the balance due, we all need a little help sometimes. Then there is the ever-changing tax system, and tax reform, which can render you feeling as though choosing a tax preparer is the most daunting task you can endure. Did you know that, because needs change and the relationship is no longer productive, the average person changes their tax preparer every three years? So how do you know who the right person is for YOU? There are hundreds of “tax guys” in any given city; most people know at least one.

Not to mention the plethora of CPA firms and companies that will do tax prep while you shop. So, what must you look for in a tax preparer? While numerous factors will be explored in this article, one thing to make crystal-clear is that the price should not be a deciding factor. You wouldn’t skimp on doctors or lawyers; don’t cut corners by getting a bargain-basement tax preparer, or you could end up with an expensive (and possibly illegal) disaster on your hands. Respectable tax preparers are extensively trained, ethical and available to serve your needs.

1. PTIN

As of February 1, 2018, there are 704,363 registered tax preparers in the United States. The PTIN (preparer tax identification number) must be applied for through the IRS; there is no other way to get it. The IRS verifies the tax preparer is who they say they are and that they are current on their income taxes. Do you want to work with a financial professional who doesn’t pay their taxes? This identification number is a security measure for the tax preparer. Just like you don’t want your social security number floating around the world, they don’t either.

Instead, the PTIN is a replacement number for tax purposes only, and the IRS requires it for anyone who charges a fee for preparation; it must be renewed every year. If you come across a tax preparer without this number, that means the IRS does not know who they are, and they are not registered to prepare tax returns professionally. Be sure this is a necessity when you are choosing a tax prep provider. One thing to note about this credential: this identification number only allows a person to prepare taxes for compensation; not to represent you in the event of an audit.