Is Your Tax Preparer Certified? The Qualifications of a Certified Tax Preparer
Do you know if your tax preparer has the proper certifications? You might not know this, but there are certain types of training and licenses that every tax preparer you use should have.
However, if you're not familiar with the tax industry or using a tax preparer for the first time, it can be difficult to know who has the right qualifications. Finding a certified tax professional is crucial, because you're handing over some financial control of your business. If your taxes are completed and filed properly, there could be serious consequences down the line.
So how do you know if your tax return preparer has the right qualifications? We'll break down exactly what you need to look for.
Ask Your Certified Tax Preparer the Right Questions
Before you commit to any tax professional, don't be afraid to ask them plenty of questions about their background, qualifications and educational history.
Some tax professionals might hand you a business card with tons of different letters and titles after their name. Don't simply trust as proof that they're qualified. Make sure you inquire about their past experience and how they plan on helping you file your taxes properly.
Know Your Acronyms
As we mentioned earlier, there are many titles and certifications that tax preparers can have. Depending on your personal financial situation, one professional might be better than another.
In order to determine your needs, speak to your potential tax preparer beforehand, but also do your own research to make sure the information you're getting is accurate.
Some of the most common titles a certified tax preparer might have include:
- CPA (Certified Public Accountant) is the only official license in accounting. This certification takes time and passing an exam to complete, but not all CPAs are experts in tax. Some can have more experience in financial planning, auditing and more.
- VITA (Volunteer Income Tax Assistance) are volunteers who are trained by the IRS to complete tax returns. They are typically used by people who have low incomes or English is their second language. They likely won't be used by business owners.
- CFP (Certified Financial Planner) professionals must meet certain education requirements, pass an exam and have experience in their field. This could be a good option for businesses that need more comprehensive financial advice, not just someone to prepare their taxes.
- EA (Enrolled Agent) is the highest status the IRS awards. A preparer can only become an EA by working for the IRS or by passing an IRS-issued exam. EAs also have to keep up with rigorous standards to keep this certification, so they're a great option for someone looking for a highly qualified tax preparer.
On the other hand, some tax preparers might not have any official certification at all. This doesn't necessarily mean they aren't qualified. Again, make sure you inquire about their past experience to ensure you're working with a legitimate professional.
Make Sure They Have a PTIN
According to the Internal Revenue Service (IRS), all paid tax preparers must have a PTIN, which stands for Preparer Tax Identification Number.
If your tax preparer doesn't have this number, then they're likely not qualified to prepare your taxes. Establish that they have this number in the beginning because it's not something you want to find out after April 15th.
Are you ready to start your taxes today? Contact us for a free consultation today. We'll show you how we can help make filing your taxes a breeze.