It's important to find a CPA (Certified Public Accountant) that is the right fit for you and your situation. There are a number of places to inquire about a CPA: Get a suggestion from a friend, ask another professional for a reference (i.e. your attorney), ask the owner of a local business you frequent, or look in the Yellow Pages or one of the CPA referral directories on the Internet, or call Union Cities (1-888-581-3124) for a leading business service, or go to our business services link.
Once you have found a CPA, ask them for background information. Where did they go to school? In what area of financial consulting do they specialize? Are they a Certified Public Accountant (Not all accountants are CPAs)? Who are their clients? Call these clients to see if they're satisfied with the service they've received. Where and when did they receive their license to practice? What is their fee range? These questions may seem basic, but not asking them can sometimes lead to unpleasant surprises.
CPA vs. Accountant
A CPA is someone who has passed the Uniform CPA Examination. This designation refers to professionalism and integrity. There is a vast difference between a CPA and an accountant. A CPA has passed a very difficult examination and is certified in the state. An accountant is an individual who practices accounting but has not passed the CPA exam. A practicing CPA is required by law to keep abreast of the changes in the accounting profession by taking Continuing Professional Education. In order to get the most qualified and professional service, choose a CPA.
Choosing a Tax Preparer
Don't wait until April 15 to determine that you need professional help to complete your tax return. You should review your tax forms at the beginning of the year and decide whether or not you can complete them on your own. If you decide that you need professional help, you'll have time to locate a qualified tax preparer who can best meet your needs.
Who Needs a Tax Preparer?
It is not necessarily your level of income, but rather the complexity of your return that determines your need for a tax preparer. If you have experienced a major lifestyle change, such as a divorce or a drastic change in your financial situation, you may want to hire a tax preparer. Other factors that may trigger the need for professional help include owning a home-based business, claiming substantial itemized deductions, or owning rental property. Similarly, you should probably seek assistance from a CPA or tax attorney if you need to claim a major casualty loss, account for a change in child custody, or deduct investment-related expenses.
To find a qualified tax preparer, ask for references from family, friends and business associates, especially individuals who work in your field. Be sure these people have actually used the preparer. Ask them about the quality of the preparer's work, responsiveness to questions, and ability to complete the return in a timely manner. Remember, the likelihood of errors is greater if your return is hastily prepared. Don't rush to hire the first tax preparer with whom you speak. Contact several preparers by phone and ask them to discuss their qualifications. If they don't have time to give you an interview, they may be equally unresponsive to questions and concerns about your tax return preparation. Be sure to do this well before April 15th so that the tax preparer can devote ample time to interview with you.
Ask About Fees
When interviewing a prospective tax preparer, be sure to ask about the fee structure. Some will charge on an hourly basis, others on the number of forms to be completed, and still others will give you a fixed price. Prices may range from less than one hundred dollars to a few thousand depending on the nature of your return. How your records are organized also will have an effect on the fee structure. Generally, beware of tax preparers who base their fees on a percentage of your tax refund. You should also stay away from preparers who guarantee you a refund or are unwilling to sign your return. To help the tax preparer estimate the cost of doing your return, give him or her a copy of your prior year's tax return. You also may want to ask the preparer if he or she will reimburse you for mistakes that result in penalties or interest charges. Don't let the fee structure alone affect your selection of a tax preparer. An individual who charges more, but has a reputation for quality work, may help you to avoid costly mistakes and save you more money in the long run.
Evaluate Standards and Experience
Enrolled agents, tax attorneys and CPAs prepare tax returns. So do numerous individuals who present themselves as tax preparers. However, neither the IRS nor other government organizations has licensing requirements for such tax preparers. What's more, not all tax preparers are permitted to present your case to the IRS in the event that your tax return is audited. Generally, only CPAs, tax attorneys and enrolled agents are permitted to represent clients before the IRS. In evaluating tax preparers, consider how long they have been in business and whether they work full-time or part-time. Ask whether they are members of the CPA Society or other professional associations. Ask if they participate in Continuing Professional Education. Tax law changes regularly, so you want to be sure your preparer is always up to date. Keep in mind that CPAs who provide tax services have passed a stringent professional examination, which concentrates in part on tax law, and have met experience and education requirements in order to obtain their CPA certificate. Enrolled agents are admitted to practice before the IRS after passing an IRS examination, or after completing five years of audit-level service as an IRS employee.
Hire for the Long Haul
If you think you'll be using a tax preparer in future years, be sure the individual you retain to do your return can meet your needs today as well as in the future. For example, if you anticipate a big change in your finances over the next year, it may be wise to retain a tax professional who can help you to devise an effective tax-planning strategy long before your tax return is due. Although tax-return preparers also may be subject to penalties for tax-return errors, CPAs point out that you are still responsible for the accuracy of the information submitted to the IRS. Even if your tax preparer makes an error and underestimates your taxes, the IRS could still charge you with penalties and interest. It would be your responsibility to pay these costs. [back] [pick a state]