A B Cs of Tax Preparers and CPAs

An old joke goes something like this: People who complain about taxes can be divided into two classes: men and women. As tax season quickly sneaks up on Americans this year, we all hear the truth of that joke quite plainly: taxes stink. But luckily, there are trained, professional individuals who can file your tax return for you, erasing the headache that comes from such a formidable task. If you have never used a tax agent, then read on and learn the basics before you schedule an appointment with a local tax office.

• A CPA is what? One of the most important pieces of information to have before scheduling a meeting with a tax professional is knowing who is who. Enrolled agent: An enrolled agent is a tax preparer licensed by the IRS. Enrolled agents are best used for tax audits, complex tax issues, and responding to tax collectors. CPA: A CPA is a professionally trained accountant licensed by your state. CPAs are generally used for big business accounting, tax audits, and business consulting. Tax preparer: A tax preparer is usually registered by the state, and is best for straightforward (i.e. typical) tax returns.
• What to have: Before you head out of the house to meet with your tax preparer, there are a few things that you will need to have with you. Tax documents: All of the documents that have been sent to you in the mail will need to be seen by your taxman. This also includes any documents that your place of employment makes available online. Identification: Along with your important tax documents, you will also need to have your photo identification and Social Security card (for yourself and any dependents). Bank account information: If you are planning on receiving a tax refund, then you will definitely need your checking account number (including routing number) for direct deposit. Finally, you will also need to have a copy of last year’s tax return.
• What are your tax needs? Who you choose to file your taxes for you depends upon your individual tax needs. If you are planning on filing a more straightforward return, then one of the national tax franchises will be a great choice for your needs. But if your tax return is far more complicated (you may be a business owner or have much of your assets in stock), then you will need the services of a tax professional with a background in your specific area of need. No matter who you choose, though, make sure that they have the appropriate background, attention to detail, and industry experience that your finances deserve.
• Shop around for good rates: When paying for your taxes to be filed, you are the customer. That entitles you to a fair price and an appropriate guarantee of the quality of work being done on your behalf. Don’t be afraid to call or visit your local tax offices to request their rates; at the end of the day, your main concerns should be getting a good tax agent to do the job right, and not paying too much for the service.

But above all, remember that your taxes should not have control over you. I’ll leave you with this lighter thought: It would be nice if we could all pay our taxes with a smile, but normally cash is required.

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