According to the Internal Revenue Service (IRS) 60% of taxpayers use professional tax preparers to file their income taxes. If you decide to turn to a professional to help you with your returns, your first step is to identify the type of tax preparer you need.

What is a Tax Preparer?

A tax preparer is a professional that is qualified to calculate, file and sign income tax returns on behalf of individuals and businesses.  A preparer takes their client’s financial information, completes their taxes, files their taxes, and provides tax advice.

Paid preparers fall into different categories:

  • Certified public accountants: CPAs are accounting professionals who have met state licensing requirements and have extensive educational training and experience.
  • Enrolled agents: These are individuals who have passed a three-part Special Enrollment Examination demonstrating competency in federal taxation and been licensed by the IRS.
  • Any other preparer with a PTIN: These are individuals who believe they have sufficient knowledge to prepare returns and have paid the fee to obtain a PTIN. They are not subject to any oversight by a state, a professional board, or the IRS.
  • Tax attorneys: Annual filing season program participants: These individuals have completed an IRS program and obtained continuing education.

Check the Tax Preparer’s Credentials

The IRS requires anyone who prepares or assists in preparing federal tax returns for compensation to have a current preparer tax identification number (PTIN). This number is issued annually to eligible preparers.

Since you have to trust tax preparers with the most personal and sensitive details of your financial life – marriage, income, children and social security number, be sure to choose your tax preparer wisely.

Do they offer e-file service?

The IRS requires any paid preparer who does more than 10 returns for clients to file electronically via the IRS’ e-file system. If your tax preparer doesn’t offer e-file, it may be a sign the person isn’t doing as much tax prep as you thought.

Do they offer representation and assistance beyond preparing tax return?

Anyone with a preparer tax identification number can handle and file your taxes, but it’s best to find someone who also can handle audits, IRS collections, and appeals especially if you own a business.

Enrolled agents, CPAs and attorneys with PTINs can represent you in front of the IRS on audits, payments and collection issues, and appeals. Preparers who just have PTINs can’t — even if they prepared your return.

Choose a tax preparer who will make themselves available after the filing season is over. The best tax preparers will take your call, respond to your email, or welcome you for a visit if you need to follow-up on any issues.

Lastly, you want a preparer with clients who are similar to you. That way, you’re more likely to get the best service for your particular needs.

Cachet Business Directory lists trustworthy financial professionals and tax preparers:

Unlimited Taxes, LLC

The Savvy Accountant  (New Jersey & Virtual Nationwide)

Live Financially Savvy  (Virtual Nationwide)

Credit Repair

Rise 365

Notary service

Kishmon Services, LLC  (Richmond, VA & online)

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