How to Hire a Tax Preparation Service

Finding a tax preparer can be as intimidating as the idea of filing taxes. While many claim to offer expertise, the truly qualified offer more than just some accreditations after their name on a business card.

To find the right one for your business, it pays to ask the right questions. These eight can help.

1. What’s your PTIN?

PTIN stands for Preparer Tax Identification Number. By law, anyone who prepares federal returns in exchange for payment must have this. While it’s not an indication of proficiency or expertise, having a PTIN does show that the preparer you’re working with is legitimate.

2. What’s your specific tax training?

Not all tax professionals are alike. Skill levels can vary, and the person your cousin recommends may not be familiar with the tax needs and obligations of your type of business. Ask early in the process what type of credentials your preparer has. It can save you down the road.

3. What are your fees?

As a rule of thumb, the more complicated your taxes, the higher the fee. But if you don’t yet know how complicated your taxes are, then what? A good preparer will have ballpark examples based on experience and will be happy to give you a quote.

4. How will my taxes be filed?

Because it’s faster and more accurate, paid tax preparers who file more than ten returns are required to file electronically unless the client chooses not to. If your preparer doesn’t e-file it may be a red flag.

5. When do I get a copy of my return?

It’s not uncommon for individuals to leave their tax preparer’s office without a return. They can get complicated and time-consuming, even when filing electronically. But at some point, you should get a copy. If the prepare can’t tell you when, find one who can.

6. What happens when tax season is over?

For most preparers, tax season is year round. Yes, it spikes in Spring, however, most business owners have tax questions or may need to file an extension. You want a preparer to be there for you when necessary, not one who will light out of town after April 15.

7. Are you familiar with my state tax laws?

While federal returns are basically the same no matter where you live, state tax laws can vary significantly. Ideally your preparer will have the expertise to file both federal and state returns on your behalf.

8. What happens if I’m audited?

An audit can require time and resources you may not possess. Ask your tax preparer if he or she can handle the demands or whether it’s even something they get involved with. Not all tax preparers have the qualifications to represent clients in court or before the IRS. While it’s unlikely an audit will occur, you still want to be prepared.

Finding the right tax preparer for your business can be time consuming and demanding but the effort can pay off in reduced taxes and a stronger bottom line.

 

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