Types of Professionals Who Prepare Tax Returns
Tax return preparation could be time-consuming, complex, and simply frustrating. When there is other work to finish, taxes seem to never get removed from the to-do list. Nevertheless, getting such taxes filed is a need, and the safest way around it is to hire a tax professional. Keep in mind that even minor errors can be costly and troublesome; but with an expert, you can avoid them.
The question is, which expert will it be? There are many different types of professionals out there who are more than happy to help you with your taxes. Below is a quick rundown of the most popular designations you will see:
Certified Financial Planner (CFP)
A CFP has to meet specific education requirements, pass an exam, acquire experience in finance, and satisfy other particular qualifications. Some CFPs know much about filing taxes, but others don’t. If you are looking at someone with this designation, research more about their experience as a tax preparer prior to hiring them.
Certified Public Accountant (CPA)
As their designation indicates, certified public accountants are people who have been certified by the government to work as public accountants. It is the sole licensed qualification in accounting. Depending on the particular state requirements, majority must meet certain educational requirements apart from passing a set of exams. Covered under CPA services are financial planning, business evaluation, auditing, and of course, accounting. Some CPAs are exclusive tax specialists.
Enrolled Agents (EA)
An enrolled agent is a person who has passed an IRS exam or was employed by the IRS employee in the past. EAs are required to complete ongoing education courses to remain updated on tax law changes, and must follow strict ethical standards. This is the highest IRS-awarded credential a tax preparer can have.
JD (Law Degree) and LLM (Master of Law)
Anyone who has these degrees may have a specialty in taxation, but this is not the case all the time. If you must work with any legal professional, make sure they focus their pratice on taxes and not a whole range of areas. The attorney who helped you with your divorce or personal injury case is most likely not the best choice for your taxes!
Volunteer Income Tax Assistance Volunteer
A VITA volunteer is an IRS-trained tax preparer who prepares basic returns. However, if you are a business owner, this is often not the best person to approach.
Lastly, if you check further, that there are bookkeepers, accountants and unlicensed tax preparers who have no formal credentials, yet are completely reliable. This does not mean they should not be considered. But you may have to look deeper into their tax preparation knowledge and experience.
Source: Online Tax Return