Types of Tax Return Preparers
Tax return preparation may be time-intensive, challenging, and downright maddening. When there is other work to finish, taxes seem to never get removed from 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 various types of professionals out there who are can help you with your taxes. Below is a quick rundown of the most popular designations you will see:
Certified Financial Planner (CFP)
A CFP should pass an exam, fulfill certain educational requirements, obtain experience in finance, and meet other specific qualifications. There are CFPs who know a lot regarding filing taxes but not all of them do. 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. It is the sole licensed qualification in accounting. 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. Some CPAs specialize purely in taxes.
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 must complete long-term education courses to remain up-to-date on tax law changes, and are required to follow certain ethical standards. This is the highest credential any tax preparer can be awarded by the IRS.
JD (Law Degree) and LLM (Master of Law)
Any person with these degrees may have a taxation specialty, but this is not true 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 did a great job with your car accident or divorce may not be your best option for your taxes!
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.
Resource: Discover More