Tax Professional Reveals Why Preparing Your Own Taxes May Be Best

With the range of good software options available to self-prepare tax returns, not everyone needs a tax preparer to help them. However, when you reach a certain level of complication with your financial life the fees paid to retain a qualified professional are far less than the savings you will receive.

Tips For Hiring a Tax Preparer...

How do I know my preparer is qualified?

Professional designations such as Certified Public Accountant (CPA) or IRS Enrolled Agent (EA) are a start. Preparers who have these qualifications have more education and are required to take more continuing education each year. Then it is important to ask questions and make sure your preparer really is familiar with small businesses and a number of their clients are in your same situation.

What about the big 4 accounting firms?

Surely there are many small businesses who have had good experiences using those firms. However, we have seen a lot of clients who have gotten "lost in the cracks" by the big firms, that didn't really look out for their interests as their business was considered too small to be taken seriously. Finding the tax firm that is the right fit and will look out for your individual interests is key.

What about self-preparation?

Self-preparation is almost as efficent as using a paid preparer for 80% of all taxpayers. With high quality software you likely can figure out much of what is needed, and we encourage that. We specialize in the difficult issues that the other 20% run into, or helping taxpayers out who are simply uncomfortable filing their own returns and want the assurance of having a return backed by our Audit Guarantee.

How important is face-to-face communication?

It is paramount that you have good communication with your tax preparer regardless of if that communication is in person, over the phone, or via emails. Sometimes meeting in person can be a distraction from the process and it is easy to forget questions you wanted to ask or an income or expense entry. We've found that the process often works smoother and a surprising amount of rapport can be developed with only an online connection for tax preparation. However, some people are more comfortable with this than others and it is not for everyone.

What questions should I ask a preparer?

It is a good idea to ask if they have clients in the same line of business and if they are familiar with any specific aspect you are working with. A good question to ask about is if they can explain why straight line depreciation would be better in certain circumstances than accelerated depreciation. If they take the time to explain and you understand their explanation, you may have found a preparer that is worthwhile for you to work with. Remember though that most good preparers are busy around filing deadlines and have to be careful that new client's aren't just asking questions to use for self-preparing. So if you find a preparer who gives you somewhat vague answers that may be the reason why.

What questions should a preparer ask me?

Your tax preparer should be making an effort to understand your line of business and what kinds of expenses you may have that you haven't thought of deducting. The questions they ask you during the screening process is often easier to judge the preparer's value on than the answers to questions you may pose.

What about the cost of the preparer?

Like many things in life, with tax preparation you get what you pay for. High quality services don't need to be the most expensive, but they usually are not very cheap either. Professionals charge prices in line with their value, there usually is high demand for quality services and the prices rise to meet that. One thing to note is that most professionals will ask you to sign an engagement letter at the beginning of service that outlines the total costs you are expected to pay. This is important as all the additional forms and entries related to small business tax preparation can add up to being quite substantial if charging on a per form basis.


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