Tips for Hiring an Income Tax Preparer

According to surveys, around 1/3 of people hire tax advisors or tax preparers to file their tax returns. Unfortunately, a lot of people don’t know much about tax preparers. They don’t even know how to find the ideal one.  

Around 75% of people who hired tax preparers did not ask about the credential of the preparer. In addition to that, around 70% of them did not ask if the preparer will represent them in a tax audit.  

However, that should not be the case for you. Keep in mind that you’ve got to share your details to a tax preparer. Thus, you need to find one that is reliable and honest.  

Here are several tips you can follow when hiring an income tax preparer for your income tax preparation.  

Check If They’ll Help You 

Attorneys with PTINs, CPAs, and enrolled agents can represent you in front of the IRS during appeals, collection problems, payments, and audits. Prepares who simply have PTINs cannot do this. Prepares who finish the Yearly Filing Season Program can represent clients only in restricted cases.  

Also, you need to consider availability. The best tax preparers will always be available to help you even after the filing season is done.  

Verify if They Will Sign the Contract 

The law requires hired preparers to sign the returns of their clients and offer their PTINs. You should not sign a blank tax return. The prepare can put anything on it. This includes their own bank account number. Thus, they can steal the money. 

Think About Tax Advisors Who Do Not Offer E-Filing 

The IRS requires any hired prepare who does more than 10 returns for clients to electronically file through the e-file system of the IRS. If the tax preparer does not provide e-filing, it might be an indication that he is not doing as much tax preparation as he claims.  

Compare Fees 

How much does a tax preparer charge? On average, you should expect to pay around $200 for a Form 1040. Usually, if a tax preparer charges an hourly rate, you should expect to pay $120 per hour.  

Tax preparers often charge a minimum fee plus cost based on the complexity of the process. You should avoid the tax preparer if he/she says that the fee is based on the size of the refund.  

Try to Hire Members of an Association 

It’s always good to hire a tax advisor who is also a member of the American Institute of Certified Public Accountants, the National Association of Enrolled Agents, the National Association of Tax Professionals, or the American Academy of Attorney CPAs.  

These associations usually have different certification programs, professional conduct requirements, and codes of ethics.  

Ask for the PTIN  

The IRS requires tax preparers to have a PTIN (Prepare Tax Identification Number). However, volunteer tax preparers do not require PTINs. You’ve got to ensure your income tax repaper puts his/her PTIN number on your return because the IRS also requires this. Thus, you should always ask for the PTIN before you hire one.