Types of Tax Return Preparers
Tax return preparation can be time-consuming, complicated, and downright exasperating. When there is other work to do, taxes seem to never get stricken off of the to-do list. Still, those taxes getting filed is a necessity, and the safest method of doing it is hiring a tax professional. Remember, even small mistakes can be costly and troublesome, working with an expert however helps you prevent them.
The question is, which one must you hire? There are many different types of professionals out there who are more than happy to help you with your taxes. The following is a quick list of designations most common today:
Certified Financial Planner (CFP)
A CFP should meet particular education requirements, pass a test, be experienced in finance, and satisfy other specific qualifications. Some CFPs are knowledgeable about filing taxes, but not all are. If you are looking at someone who has this designation, find out more about their tax filing experience before you hire them.
Certified Public Accountant (CPA)
As the designation indicates, a certified public accountant is an individual who has been certified by the state to act as a public accountant. In the field of accounting, it is the one and only licensed qualification. Depending on certain state requirements, most people need to meet certain educational requirements besides passing a number of exams. Accounting, financial planning, business evaluation and auditing are they key services provided by CPAs. There are some CPAs who specialize exclusively in taxes.
Enrolled Agents (EA)
An enrolled agent is an individual who has worked in the IRS before or has passed a three-part IRS exam. EAs need to complete continuing education courses in order to stay up to date on changes in tax laws, and should adhere to particular ethical standards. This is the highest IRS-awarded credential a tax preparer can have.
JD (Law Degree) and LLM (Master of Law)
Anybody with these degrees can have a taxation specialty, but not in all cases. 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
VITA volunteers are tax preparers IRS-trained in tackling 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 you have to rule them out. You probably just have to dig more into their tax experience and education.
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