Tax season is here, so now is the time to find the best tax preparer to help you file your tax return. The right person can provide guidance, help you understand your tax rate and identify key tax deductions and credits to reduce your tax bill.
“Getting your tax return done can feel like a stressful task,” says Megan Killian, executive vice president of the National Association of Enrolled Agents in Washington, D.C. But working with a tax professional can ensure you get year-round assistance to meet your tax needs, she says.
Here are a few ways to help you find the best tax preparer for you, before the looming tax deadline.
1. Ask for referrals from colleagues, family or friends
One great way to start your search for a tax preparer is to ask around. Word of mouth is a powerful tool and a great way to find other satisfied customers. Many people find the right tax pros by asking friends and searching online.
“A simple Google search of ‘tax preparers in my area’ can yield a lot of results,” says Misty Erickson, tax content program manager at the National Association of Tax Professionals in Appleton, Wis.
2. Ask questions and dig deeper
While referrals are a good place to start, you can’t stop there, Erickson says.
“Referrals can help narrow down a list, but taxpayers should also take time to do their own research,” she says. “Just because the tax pro helped out your friend or family member doesn’t necessarily mean they are a good fit for you.”
Once you find some tax preparers with whom you might want to work, consider asking additional questions to narrow down your list. Here are some questions to consider:
- Do you have experience with my type of tax situation?
- How long have you prepared tax returns?
- Can I follow up if I have questions after tax season is over?
- Do you meet clients virtually or in person?
“Another factor to think about is whether your communication styles mesh. If they mainly want to communicate via email and you like to talk either in person, on the phone or in a virtual meeting, you will most likely be frustrated throughout the process,” Erickson says.
3. Search for a tax professional with credentials
Ideally, the tax professional you work with should hold at least one credential, typically obtained by successfully passing an exam or completing years of education and experience.
“When selecting a tax professional, consider whether your tax professional has licenses and credentials,” says Alton Bell, an enrolled agent and founder of Bell Tax Services in Chicago.
Taxpayers should look for a credentialed professional such as a certified public accountant (CPA) or enrolled agent (EA), Bell says.
Bell also recommends reviewing a tax professional’s credentials and any disciplinary history. (Relatedly, the IRS has warned about “ghost tax preparers” who refuse to sign tax returns — a big red flag.)
Here is a list of credentials to consider when selecting a tax professional.
Certified Public Accountant
A certified public accountant (CPA) is someone who passed the Uniform CPA Examination. Upon passing the exam, the state board of accountancy provides the accountant with a license. To maintain the license, CPAs must meet education and experience requirements.
Before hiring a CPA, use CPAverify.org, maintained by the National Association of State Boards of Accountancy, to verify the CPA’s license.
Enrolled Agent
The IRS describes the enrolled agent designation as “the highest credential the IRS awards.” Enrolled agents must pass a three-part individual and business tax exam, and they can represent taxpayers before the IRS. (Former IRS employees may forego the exam and qualify for the certification based on their experience alone.) EAs are guided by strict ethical standards and must complete 72 hours of continuing education every three years.
“With an enrolled agent, you know you are working with a professional that has been credentialed through the Department of the Treasury, adheres to a professional code of ethics, and is educated and informed on all up-to-date tax laws and forms,” Killian says.
The National Association of Enrolled Agents offers a “find a tax expert” tool to find an EA in your area.
Tax Attorneys
A tax attorney is someone who practices law but specializes in taxation. In addition to passing the state bar examination, they are licensed by a state board. Most tax attorneys can prepare tax returns, create tax strategies and are allowed to represent clients before the IRS. Some tax attorneys also specialize in estate planning to help clients reduce their tax liability.
4. Ask about prices
Before hiring a tax professional, you need to understand their price structure. Killian suggests requesting a consultation to discuss services and fees upfront. “Beware of anyone promising big refunds or other claims,” Killian says.
Reputable tax professionals won’t base their fees on how much they can get back for you. Typically, a tax professional’s fees are based on the required tax forms and the time it takes to complete the return. For example, if you earned income from self-employment, you can expect to pay more than someone with only a simple form W-2 to file.
The average cost nationwide of a tax return with itemized deductions is about $323, according to a 2021 study by the National Society of Accountants, the most recent data available.
Depending on your tax professional’s credentials and experience, and the complexity of your tax return, the cost may be higher.
However, Erickson warns that shopping for the lowest fees doesn’t always pay off. “Cheaper may not warrant better results,” she says.
5. Consider online tax software
While finding a tax professional can be one way to get help to file your tax return, it’s also true that the best online tax software programs can guide you as you complete your tax return yourself. Many online tax software programs use an easy-to-follow question-and-answer format to help move you step by step through your tax return.
Plus, many taxpayers don’t realize they may qualify for free tax preparation using online software. Here are a few ways to file for free.
IRS Direct File
The IRS Direct File program is a way to file your federal income tax return for free, directly with the IRS. The IRS program offers guidance throughout the process of completing your return, plus access to assistance via chat or phone.
Currently, you must reside in one of 25 participating states, and there are limitations on the types of tax situations that are eligible to use Direct File. For example, if you’re self-employed, have rental income or want to claim deductible IRA contributions, you can’t use Direct File.
IRS Free File
The IRS Free File program allows you to file your tax return for free with one of eight participating online tax software companies. To be eligible, taxpayers must have an adjusted gross income (AGI) of $84,000 or less for the year. (That AGI limit applies to any filing status, including single filers, married filing jointly, etc.)
Volunteer Income Tax Assistance (VITA)
The IRS’ VITA program offers free tax preparation options for taxpayers who earn less than $67,000 a year, have a disability or speak limited English. You can find a VITA site by using the IRS’ online location tool.
Bottom line
Doing your homework upfront and asking questions can ensure you find the best tax professional to meet your needs. But more importantly, don’t delay. Finding a tax professional sooner rather than later will ease your tax-filing process ahead of the busiest part of tax season.
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