How to Choose a Good Tax Preparer

Tax Day is rapidly approaching and you may be on the lookout for a tax preparer for yourself or your business.  How can you ensure that you choose a good tax preparer?  Choosing a good tax preparer is indeed a difficult and important decision. Along with your financial adviser and banker, who you choose as tax preparer for your individual or business needs can have a strong financial impact upon you.

Here are some important factors to consider and steps you can take to make sure you locate a reputable, competent, and knowledgeable tax preparer.  You should find out about the tax preparers professional certification, discover their reputation in the business community, get recommendations from family and friends, and ask a prospective tax preparer for professional references.

Professional Certification

As you choose a tax preparer, check their professional certification.  If possible, select a Certified Public Accountant (CPA) or Chartered Accountant (CA). In the United States, a CPA has an undergraduate college degree that includes a significant number of accounting courses, passed a grueling 17 hour test, completed 2 years of specialized experience under the supervision of another CPA, and attends 40 hours of Continuing Professional Education (CPE) every year. Keep in mind that each state has different rules for CPA’s regarding education, experience, and CPE hours.

You should also conduct a search online for your local State Board of Accountancy and check the website for more information on the tax preparer you may choose. Does the individual or firm have any ongoing actions against them? Have they been censured before? Are they in good standing with the State Board? These are all questions that your State Board of Accountancy website should be able to answer.

Reputation Counts

Discover the tax preparer’s reputation in the local business community. Find out the tax preparer’s standing with your local Better Business Bureau, ask friends who are in the business or accounting community, and find out how long a potential tax preparer has been in the community.  Anyone from your bowling league, the folks at the local diner, or your golfing buddies are capable of helping to inform you of their experiences with their tax preparer and whether or not they would recommend them to others. 

Friends and Family

Phone a friend and ask family members. Find out who your friends, neighbors, and family members use to prepare their tax returns. But unless you trust someone’s opinion completely, don’t use this as an exclusive basis for selecting a tax preparer. Someone telling you “Aunt Edna works with a very nice man, you should go see him” shouldn’t be enough to place your financial well being into their hands, you still have to do your due diligence.

Ask For References

When you do choose a tax preparer, request professional references from them, and then follow up and call them. Ask them for positive as well as negative references or clients who they no longer work with. If a tax preparer ever hesitates to give you references, you should hesitate to give them your business. Honest tax preparers and honest tax preparation firms tend to be open and honest about their business practice and should happily provide you professional references.

None of these factors should individually preclude you from using a particular tax preparer, nor should any single person or reference compel you to use a specific tax preparer. Each source should be able to give you a better background of a particular tax preparer’s business practices, reputation, communication habits, areas of expertise, and costs to prepare a return. If your experience with a tax preparer in one year isn’t what you expect, start over again, do some research and find another. 

Finding a qualified tax preparer isn’t difficult. With a little time and some investigation, you should find a tax preparer who will help you get the maximum federal and state tax return you are entitled to receive. A good tax preparer will also become a trusted member of your financial advising team, helping you reach your financial goals. With a bit of diligence and some homework, you should locate a tax preparer to help you file your return this year and for many years to come.