The tax season is now on us. Perhaps you have received all the tax forms, so you may be facing the choice of how to filing.
Certainly, it is more expensive than using tax software, but hiring a tax advisor makes sense for a specific individual depending on the financial situation.
Here are two important factors to consider when judging whether a tax advisor is suitable for you.
- time: Even if the tax software leads you, it may take some time to submit your tax to you. You need to confirm that the data form is correctly entered or imported from the tax form. This takes at least a few hours, and the time is valuable.
- complicated: The more complicated the financial situation, the more tax advisors may help you. Do you have partnership income or S -company income? Is it the minimum tax for the past few years? Did you receive the stock option this year? Tax software can handle these problems, but it takes time and increases the risk of mistakes (and audit).
If your situation is determined to guarantee the support of an expert, it is worth exploring some questions. What is a tax advisor exactly?
Who counts as a tax advisor?
Anyone IRS prepares the tax identification number (For short, “ptin”) can be paid to submit a tax return on behalf of others. However, simply having PTIN does not talk about tax filers much. Tax filers have various experiences, skills, and expertise. What you really want is not only preparing for your return, but also a qualification and experience -level expert who are qualified to provide advice on your financial situation using her knowledge of tax law. I am an advisor.
There are three different specialized certifications to consider, and each is qualified to practice tax advisors with unlimited representation rights before IRS. This means that in addition to the preparation of the return, it is licensed to represent the client in auditing, payment, collection, and appeal.
Certified Public Accountant (CPA)
The CPA has completed accounting course work, has passed the unified CPA test, and is licensed by the State Accounting Committee (need to meet experience and excellent character standards). Not all, CPA specializes in tax preparation and planning. Complaints about CPA can be searched for records, including the state committee of the accountant, and can be found with better business bureaus.
Registered agent
The registered agent has been licensed by the Internal Revenue Agency after passing the three -part structure and background check. IRS maintains complaints about agents registered on the office website for registration, and can also find complaints on the Registered Agent Association website.
Available taxpayer
The approved lawyer has graduated from the school school, passes the state bar exam, and has been hospitalized at at least one state bar. Not all, lawyers specialize in tax preparation and planning. Many tax lawyers have further completed the learning of the law school in the master's program (called LL.M. Discer). Disciplinary action against lawyers can be found by searching for a lawyer registered a lawyer.
How to select a tax advisor or tax consultant
The tax advisor with one of the above certifications is not better than any other certification in all situations. Rather, the most important thing is:
- How does a tax advisor approach the tax preparation process, including a specific experience involving a specific financial situation?
- Are you satisfied with the tax advisor?
- How the advisor consists of a fee.
You may be able to screen potential advisors along some of these dimensions based on information that can be found online. For others, the first meeting is important to judge whether the advisor is suitable for you.
1. Evaluate the quality of the recommendation of tax advisors and the confidence in their experience.
Here are some specific factors that should be carefully considered when evaluating the potential quality of tax advisors.
First, be sure to identify tax advisors that act ethically and sincerely. Before scheduling a potential tax advisor, make sure your advisor is a complaint, disciplinary action, or any other ethical violation.
When you meet an advisor, keep an eye on a strange promise. If an advisor first guarantees a specific refund without looking at your return, you need to be vigilant (probably the promise that seems to be true). If the advisor suggests that you will be an excessive aggressive tax return (because it is not based on the actual financial situation), or if you do not simply understand what the advisor is saying. Be sure to ask and keep asking until you are satisfied with the answer.
Preparing a tax advisor to return your goods will not take your responsibility for the accuracy of the tax return. Of course, advisors who intentionally take inappropriate positions in tax returns will face the results, but it is your return and you can do that.
Also, good tax advisors need to provide more value than simply entering returns. She should help build your finances in an optimal way from a tax perspective. Since all tax advisors do not have expertise in all the nuances of the tax law, it is necessary to make sure that the selected advisor has important experiences on specific problems that are looking for advice from experts. There is. Of course, there are certain common problems that all excellent advisors need to know. For example, how to maximize the value and efficacy of charitable donations, how to compare and examine tax trading off between house rental and ownership, how to save money, or give money for family.
However, in other situations where it is not very common, you need an advisor with a specific experience. If you own a business, if you are a self-employed person, if you work in a startup and own a considerable number of stock options, or a part of your income is reported by K-1 If you are (you are a business partner, or the shares of S Corporation), it will be useful for finding advisors in cooperation with a considerable number of clients with these tax issues.
Finally, maintaining recent security of personal information is more important than ever before, and tax input is part of the confidential information you have. Although there is always the risk of data infringement, excellent tax advisors take measures to protect your information. Check how your tax advisor saves your personal information and how she uses for delicate topics to communicate with you. You also need to ask if your advisor is subject to data infringement and the steps that your advisor takes to protect from the future.
2. We evaluate comfort in cooperation.
You want to make sure you have a good relationship with your tax advisor, and you want to feel like you understand each other. At the first meeting, be sure to bring an old tax return for three years to review the advisor. Ask if you missed the deduction and whether your old return would increase your audit flag. Consider the advisor's answer. Does the advisor spend time with you to ask thorough questions to fully understand your situation? Or do you hurry in a way that makes you feel that you may have missed a particular problem or nuance? Does the advisor explain yourself in a way you can understand even if you don't have a tax background? Or does the advisor confuse you?
Tax advisors can work on their own or become a larger organization or practice member. Each approach has its advantages and drawbacks. I am convinced that a solo practitioner will actually be a person who will actually prepare your return, but it may be difficult to reach the advisor during the tax season. The core problem of her specialty field. On the other hand, a larger plactis collective knowledge may be beyond that of a very talented advisor who practices himself, but the advisor personally prepares your return. It may be more difficult to guarantee.
Finally, consider whether you want to work with a tax advisor, part of your social network, or if you are introduced by a trusted family or friend. On the other hand, having a sign of the approval of the person you know and trusts may help you guarantee that your advisor is right for you. On the other hand, if she does not meet your standards, consider whether it is difficult to say goodbye with the advisor.
3. Evaluate the cost of tax advice.
The final problem you want to think is the cost. The tax preparation service can be expected to pay more for tax planning services and advice if the margin business is low (especially in competitions facing tax officers from low -cost software). The best cost structure is when the tax advisor is completed by her time or advisor and claims to a specific form to be filed. By paying the advice itself instead of a specific result, this cost agreement will properly align the tax advisor and you.
Pay attention to the compensation structure that creates conflicts of interest between you and your tax advisor. For example, some tax advisors may try to get additional revenue from customers by selling other services and financial products as well as tax preparation.
Ultimately, the cost should not only be to minimize the costs from the IRS and advisor's pocket for this year's tax return. Rather, it should be a long -term view, recognizing that a good personalized tax advice will help build financial lives in a highly tax -efficient way that can pay dividends in the coming years.
