Choosing a Tax Preparer

Do you even really need a tax preparer? Having spent over ten years in the tax and accounting profession, I question how necessary a tax preparer is for the average Joe, but I’ll digress upon this idea at the end.

Choosing a tax preparer is a difficult decision. Along with your stock broker, banker, and accountant, who you choose to prepare your tax returns can have a strong financial impact upon you. You are placing a great deal of faith in this individual, and should take steps to ensure you’re picking a good apple.

Here are some steps you can take to make sure you locate a reputable, competent, knowledgeable tax preparer:

1 – It’s all about the letters! Select a Certified Public Accountant (CPA) or Enrolled Agent (EA). A CPA has an undergraduate college degree that includes a large amount of accounting courses, passed a grueling 17 hour test, completed 2 years of selected experience under the supervision of another CPA, and attends 40 hours of training per year (known as Continuing Professional Education – CPE). Each state has different rules for CPA’s regarding education, experience, and CPE hours. Check your local state board of accountancy website for more information.

An Enrolled Agent (EA) has taken a test administered by the Internal Revenue Service (IRS) and as been granted permission by the IRS themselves to prepare tax returns. Due to the experience of each, a CPA will likely be more expensive than an EA. If you decide to employ a CPA or EA, ask for their license number and check your State Board of Accountancy website to see if their license is in good standing or if they have had sanctions against them in the past.

2 – Ask for references and call them. Ask for positive as well as negative references. If a professional hesitates to give you references, you should hesitate to give them your business. Honest people and honest firms tend to be transparent about their business practice and should be more than willing to provide references.

3 – Discover their reputation in the community. Research your local Better Business Bureau, ask friends who are in the business or accounting community, and find out how long they’ve been in the community. Is it their first year of operations and their “office” is a RV with the motor running? Not a good sign.

4 – Phone a friend. Find out who your friends, neighbors, and family members use to prepare their tax return. But unless you trust someone’s opinion completely, don’t use this as an exclusive basis for selecting a tax preparer. Someone telling you “My Uncle Louies’ got a guy that gets him money back every year” shouldn’t be enough to place your financial well being into their hands, you still have to do you due diligence.

You may also ask yourself if a tax preparer is necessary. Yes, tax forms and IRS regulations are near impossible to comprehend, but new online filing websites like and TurboTax (just to name a few) make tax filing a logical and manageable process. Unless you have your own business, multiple rental properties, or extensive/complicated investments, you may be able to save some money by preparing your tax returns yourself. Good luck with your filing this tax year!