Choosing A Cpa
Choosing a CPA can be tricky. What are the different types of tax preparers? How do they become qualifed to be tax preparers?
Knowing the background and training level of the person who's helping you with your taxes is essential in order for you to best understand the type of service you're receiving. Here are some different types of tax preparers, what they do, and what their job qualifications are.
• Internal Revenue Service. You can actually get free tax help from the IRS. You'll be preparing your own returns, but they offer free publications for you to use and you can even attend free tax seminars. You need to know that federal IRS employees are not income tax preparers, but they can offer invaluable help for someone who is trying to file their taxes on their own and wants some advice.
• Tax Services. You can find tax services on the local level (individuals who may be proficient in tax laws and services) and on the national level (chains that employ people proficient in tax laws and services). Convenience is the name of the game with tax services. You'll want to interview any tax service thoroughly about their level of experience and knowledge, before you choose to do business with them. Tax preparers in franchise offices attend a 75-hour tax seminar given by the company. Employees of these offices typically are only required to have a high school diploma and the ability to speak fluent English.
• Enrolled Agent. An enrolled agent is a person who has passed an extensive two-day IRS exam on federal tax issues or has worked for the IRS in a qualifying position. These are independent consultants who may work for their own business or for another tax preparer. Enrolled agents often specialize in a particular area of tax information, so you need to be sure to find an enrolled agent proficient in your particular area of need.
• Accredited Tax Preparer. These are preparers who have taken advanced coursework administered by the National Endowment for Financial Education. They are one step above an enrolled agent on the tax preparer food chain. They are able to handle tax returns for corporations, partnerships or individuals.
• Certified Public Accountants. A CPA has a college degree as such, has successfully completed a state qualifying exam and meets other licensing criteria for your particular area. They know accounting, and are usually the most proficient in tax preparation. You need to make sure, however, that you choose a CPA who continues his or her education, because tax issues and laws are constantly changing.
• Tax attorneys. These are the most expensive of all tax preparers, but they are used for those who need to shelter part of their income.