Choosing a Tax Preparer

By choosing the right professional to prepare your income tax return you can save hundreds of dollars. If you're paying for help, that person should be qualified and know how to get you the most deductions, therefore saving you money. ShopSmart Magazine Senior Editor Judy Rohlena gives tips on how to choose a tax preparer that's right for you.

When choosing a tax preparer be aware of their level of expertise, because you will pay accordingly. Your first option is a certified public accountant. Not all CPAs do individual income tax returns so be sure to ask up front. To find one ask friends and family or go to www.aicpa.org.

Enrolled agents is another option. They have special tax training and focus solely on taxes. Requirements for an enrolled agent includes working for the IRS for a number of years or passed exams on tax codes and calculations. To locate an enrolled agent go to the National Association of Enrolled Agents Web site, www.naea.org.

You may also go to one of the national tax-prep chains we hear so much about during this time of year. Companies like H&R Block, Jackson-Hewitt, and Liberty Tax Service can be adequate for simple straightforward returns. These chains are relatively inexpensive and preparers usually have passed at least a several-week course and newcomers' work is reviewed by experienced supervisors.

There are also free tax preparations you might be able to take advantage of. If your household income is low to moderate for your community or you are 60 or older, you might get away with paying nothing for tax help. The AARP offers a tax aide service that will pair you with trained volunteers who can handle Form 1040 and schedules A and B. Go to www.aarp.org/money/taxaide for more information.

After you have narrowed down which preparer you will most likely go with you must ask a few essential questions. One such question is what kinds of clients do you usually work with? You should look for a preparer with clients similar to you.

Another question, what are your credentials? Make sure that your prospective preparer has passed recent state or federal tests. Look for seven to ten years of experience to be sure your preparer has dealt with a variety of tax and economic situations.

Ask if your return will be filed electronically. Filing electronically will ensure fewer mistakes and speeds up your refund.

Ask for a price quote. Tax preparers often say that they can't tell you what they'll charge until they determine which forms you will need. But, they should be able to give an estimated figure by presenting last year's forms. Ask for a list of all fees and avoid percentage based fees.

Audit help is another service you should ask about. CPA's and enrolled agents can usually represent you before the IRS. The national chains provide free advice to clients, but you might have to pay extra to have a person accompany you to an audit or talk to the IRS on your behalf.

For more information on tracking down the best tax preparer and other consumer tips click