8 Questions to Ask a Potential Tax Preparer

by Jessica Sommerfield · 14 comments

filing taxes
Doing your own taxes is a great way to save money, but let’s face it — some of us have pretty complicated taxes and prefer to avoid the stress of making sure everything’s accurate. Using the services of a professional who knows all the tax rules can be a load off your mind, but if you’re not careful, it can also be an unnecessary load off your wallet.

There are at least two ways your professional tax preparation can go wrong: (1) an inexperienced tax agent who fails to get you the credits you’re qualified for and inadvertently cheats you out of your maximum refund, or (2) a fee-based-on-return tax agent who encourages you to take credits you don’t qualify for, placing you at risk for an audit.

At the same time, thousands of people have their taxes prepared by a professional every year with no incident. What makes the difference? Consider these suggestions for choosing a tax professional you can trust to handle your return for years to come.

1. Ask for a referral from a trusted family member, friend or colleague.
A lot of these questions will be answered immediately if you know someone who’s used their services before and recommends them.

2. Make sure they have a PTIN (IRS Preparer Tax Identification Number).
The IRS requires this number for agents to file taxes they’ve prepared. This doesn’t necessarily mean they’re certified, educated, or experienced.

3. Ask about their credentials and experience.
There are various types of tax prep credentials depending on the state and affiliation. A reputable agent will be enrolled, certified or licensed, belong to professional organizations and involved in continuing education. As for experience, the more they have, the better — preferably 7 to 10 years.

4. Ask about fees upfront.
The IRS recommends avoiding agents whose fees are based on your total refund since it encourages dishonesty and leaves you clueless about the cost until you’ve filed. Even if they can’t give a firm amount (for instance, their rates are based on the type of tax forms you’ll require), they should at least be able to give you a close estimate based on your previous return or a rate sheet ranked by different tax situations.

5. Make sure your refund will come to you, not your preparer.
Your refund check should be sent to you or deposited in your bank account. It’s a red flag if the preparer insists it go through their office.

6. Keep an eye on how they prepare your taxes.
You’re paying them to crunch the numbers, but you should at least understand the general procedure in order to spot anything that seems wrong. Watch for the following:

  • They should e-file your returns. Agents who file 10+ returns are required to e-file. It’s the safest and most accurate method.
  • They should require your W-2, receipts and other tax-related documents. Be leery if a tax agent seems okay with filing forms based on your last pay stub.
  • They should not ask you to sign a blank tax return, fail to sign it themselves/use their PTIN, or refuse to give you a copy (they’re required by law).

Lastly, you should always look over the return carefully before signing it yourself and voice any questions immediately.

7. Find out if they provide audit assistance.
Using a tax prep chain may be cheaper, but unlike CPAs and other private agents, they’re usually only authorized to give audit advice. You’ll be charged extra to have someone accompany you to an audit or speak with the IRS on your behalf.

8. Make sure you’ll be able to contact them after you file (and after the deadline).
If anything goes wrong with your return or you have additional questions, you’ll want to be able to get in touch with them easily.

Filing your taxes is an important yearly ritual that can make a huge impact on your personal finances and information. Don’t take the authenticity or abilities of tax professionals for granted — ask these questions to protect yourself and your money.

Have you filed your taxes yet? Will you be doing it yourself or are you thinking of paying a professional to prepare the taxes for you?

Money Saving Tip: An incredibly effective way to save more is to reduce your monthly Internet and TV costs. Click here for the current AT&T DSL and U-VERSE promotion codes and promos and see if you can save more money every month from now on.

{ read the comments below or add one }

  • Max Peterson says:

    You made a good point when you said that there are taxes that are complicated, and a professional can take care of them and ensure everything is accurate. Many business owners must consider this tip so they can focus on more important business matters ad ensure that their tax documents won’t have issues. I could imagine how they could hire a business tax preparer that has the right credentials.

  • Biance A says:

    It sure was helpful when you suggested choosing a tax preparer that has a PTIN as this is a requirement from the IRS. This is a helpful tip for my aunt who is looking to hire one before she leaves the country for a 3-month long vacation. She mentioned that she wants her tax documents to be only handled by a qualified tax professional.

  • Greta James says:

    I am getting my taxes ready for the upcoming deadline. My circumstances got more complicated this past year with multiple jobs and becoming self-employed. Thank you for the tip to make sure your tax preparer has credentials and experience. I will be sure to remember this advice when I consult with a tax professional to help me get the best return possible.

  • Bea A says:

    You made a good point when you said that if you know someone who used the service of a tax preparer. This is something that I will share with my sister because she is planning to hire one. She is leaving the country in January for a few months to prepare for her wedding, so she does not have time to handle her tax documents anymore. Thanks for sharing this.

  • Ava Murphy says:

    You made a good point when you said that it is better to hire a tax preparer that has more experience in the industry. As you said, you -may choose one that has 7-10 years of experience. This reminded me of businesses that need to handle their tax papers in order to ensure that they won’t be called out by the IRS. I could imagine how crucial it is for them to hire a tax professional that knows the ins and outs of business taxes.

  • Henry Killingsworth says:

    You made an interesting point when you explained that filing your taxes on a yearly basis can have a big impact on your personal finances. I would think that it would be a good idea to find a tax consulting specialist that is working in your area and isn’t too far away. Working with a local professional means that you can have someone that you can visit in person.

  • Claire Masters says:

    It was really interesting that you said to ask a potential tax preparer about their credentials to make sure that they have the appropriate licenses and certificates. I’m nervous about the upcoming tax season since it will be my first time filing for taxes and I don’t know much about it. I think it might be a good idea to get myself a tax preparer to help me out.

  • Shammy Peterson says:

    I totally agree with what you said that hiring a tax preparer can be a load off your mind and will allow you to avoid the stress of making sure that everything is accurate. My aunt will surely be happy to hire a professional given this tip since she needs help with tax preparation. She said that she could not identify if there are errors on her tax documents due to a lack of expertise, and she wanted to ensure that she would not face any tax issues in the future.

  • Levi Armstrong says:

    I like that you said that I should hire a tax preparer who would still be available for queries and assistance after I file my taxes. This year, I made a couple of stock investments, which is why I plan to hire a tax preparer for the tax season. I’ll follow your advice because I would want to hire a professional who would not leave me hanging. Thanks!

  • Taylor Hansen says:

    Thanks for mentioning asking for close estimates for tax situations and if there are any fees. I’m thinking of hiring a tax planner for my startup tech company to help us grow and with our finances. I’ll be sure to check if there are any upfront fees with a tax preparer.

    • David @ MoneyNing.com says:

      A tax planner could be good, but I’ve found that almost all CPAs call themselves tax planners when they are really tax preparers. Good luck with the interviews and remember to ask them a ton of questions. You may be able to do the tax planning just by asking them all the questions!

  • Thomas Clarence says:

    Thank you for helping me to understand that a reliable tax preparer will have the proper licensing or certifications. My wife and I are struggling with money at the moment, and we would like to find a professional that can help us do some economic planning for the year. This information you shared will help us find a professional that will be able to help us get through these financial struggles we are experiencing.

    • David @ MoneyNing.com says:

      You are welcome Thomas. Make sure to take your time to find the right tax preparer because you don’t want to be switching from person to person year after year after year.

  • Ellen Hughes says:

    You got me when you said that tax agents are required to have IRS PTIN before they can file taxes. I will share this with my dad who wants to hire a tax preparer. He said that his job requires him to be out of the country for months, so he doesn’t have the time to prepare his tax documents. He wants to have his tax documents prepared by a qualified tax preparer. Thanks!

Leave a Comment