How to Find a Reputable Tax Preparer Near You | Personal Finance

You may need more help than usual with your tax return this year, especially if you did some freelance work, started a business, lost your job, received unemployment benefits or qualified for different tax deductions.

You can use tax software or an online program, and if your adjusted gross income was $ 72,000 or less in 2020 you can file your federal income taxes through the IRS Free File program, where the IRS partners with several online tax preparation companies.

But you may want personalized assistance when filing your return this year. A tax expert can make sure you get all of the tax breaks you deserve, especially in a year where your tax situation may be very different than it had been in the past. Many tax professionals can also help you with tax planning that can save you money in the future.

Keep in mind: You have until May 17, 2021, to file your 2020 income tax return.

What Kind of Tax Preparer Do You Need?

There are a wide range of options when searching for a tax preparer. Some just complete your federal and state returns and may charge very little if your tax situation is not complicated – if, for example, your income is from a full-time job where you receive a W-2. But if you had a few different jobs during the year, did some freelance work, started your own business or had other complicated tax situations, then you may need more help. An expert can help you figure out what business expenses you can deduct and may find breaks you never realized you were eligible for.

Anyone with an IRS Preparer Tax Identification Number can prepare federal tax returns. But there is a wide range of experience and qualifications. Certified public accountants, enrolled agents and attorneys can represent clients in front of the IRS in audits, payment issues and appeals. Annual Filing Season Program participants are other tax preparers who have completed a required number of continuing education hours to prepare for the tax season. There are also PTIN holders who have not completed these certifications and are authorized to prepare tax returns, but cannot represent clients in front of the IRS. You can look up the credentials of tax preparers in your area using the IRS Directory of Federal Tax Return Preparers.

Here are some of the different ways to get help filing your tax return.

Certified Public Accountants

CPAs must be licensed, complete rigorous education and testing requirements and meet ethics standards. You can find a CPA near you through the American Institute of CPAs search tool. CPAs have different specialties. Some focus on businesses and others more on individuals. Some CPAs also have the personal financial specialist credential and can help with taxes and financial planning.

Enrolled Agents

Enrolled agents are federally licensed and have unlimited rights to represent taxpayers before the IRS. They must pass a comprehensive exam and complete continuing education requirements. Many specialize in tax planning for individuals and audits. “An enrolled agent can represent both individual and business taxpayers at all levels of the IRS – examinations, collections and appeals,” says Morris Armstrong, an enrolled agent in Cheshire, Connecticut. You can find one through the National Association of Enrolled Agents.

You can also find CPAs and enrolled agents in your area through local organizations and referrals from friends and colleagues. They can complete your return and also help with tax planning during the year. Another option: TurboTax introduced a full-service program this year, which generally costs from $ 130 to $ 290, where you can upload your tax records, and a CPA or enrolled agent will complete the return for you.

Tax-Prep Companies and Independent Preparers

Companies such as H&R Block, Jackson Hewitt and other tax-prep services are working in person and virtually this year. Prices can vary depending on the complexity of the taxpayer’s tax return as well as the location. “If a taxpayer has multiple part-time jobs, is self-employed, or received unemployment benefits, they could have a more complex tax return,” says Mark Steber, chief tax information officer for Jackson Hewitt.

For example, Jackson Hewitt is offering in-person meetings, drop-off services, online self-prep or the Tax Pro From Home service, which is a virtual, personalized tax service where clients are matched with a dedicated tax pro starting at $ 69 plus the fee per state return. Every Jackson Hewitt office has a CPA on their team, along with tax pros who must complete a training program, says Steber.

H&R Block is also offering a range of services, including in-person, virtual and drop-off services with their tax professionals. Prices begin at $ 69 for a federal return and $ 65 for each state return. “H&R Block tax professionals have on average 10 years of experience and hundreds of hours of training,” says Andy Phillips, director at the Tax Institute at H&R Block. All of the H&R Block tax professionals must complete 60 hours of initial training, and returning tax professionals must complete an additional 30 hours of training, he says. They all have access to the Tax Institute at H&R Block, which is a research group staffed by tax experts including CPAs, enrolled agents, tax attorneys and former IRS agents.

Free Tax Preparation

Several cities, such as New York, Boston, Los Angeles and Miami, offer free tax-filing services for certain residents. For example, most New Yorkers who earned less than $ 68,000 in 2020 are eligible for the NYC Free Tax Prep, which is administered by the New York City Department of Consumer Affairs. There are free tax-filing services throughout the country that meet IRS standards. The IRS ‘Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs offer free tax help for taxpayers who qualify, generally based on their income or their age. The VITA program has been operating for more than 50 years, offering free tax help for people who generally make $ 57,000 or less, people with disabilities and those who speak limited English who need help with their returns.

What to Look for in a Tax Preparer

Ask friends or colleagues for recommendations, especially if they’ve worked with the tax preparer or tax prep company for several years. Also check out Better Business Bureau ratings and other reviews.

Make sure the tax preparer matches your needs. Do you just need someone to file your return, or would you like them to help you with tax planning for the future?

If you’re starting a business, for example, it may be helpful to work with a tax professional – such as a CPA or enrolled agent who specializes in small businesses – who can let you know about future deductions and tax-planning strategies as you build your business. If you’re about to retire and start withdrawing money from your tax-deferred retirement savings plans, it can be a good time to meet with a tax professional who also specializes in financial planning and can help you determine the most tax-efficient ways to tap your accounts.

Ask questions about the return so you understand what they’ve done and the credits and deductions they’ve taken, which can help you know how to take the tax breaks in the future. “A good tax preparer will explain each step of the process with a taxpayer and allow them to ask questions,” says Steber.

Ask what happens if you – or the IRS – have questions about your return later on. Be wary of tax preparers who just set up shop for a few months each year and then disappear, leaving you without help if you hear from the IRS with questions. “In addition to protecting your data, you want to find a tax professional who can help you year-round in case you need to amend a return or if the IRS comes back with questions,” says Phillips.

Avoiding Tax Preparer Scams

Tax scams are out in full force this year, and you need to be especially careful before handing over all of your personal information to someone who could use it to steal your identity or your money. Some crooks use the information to get your refund or other government benefits in your name; others may take your money and never file a return, and then disappear when tax season is over – before the IRS contacts you with questions about the return.

Review the return before you sign it and ask questions about deductions you do not understand. All paid tax preparers must have a Preparer Tax Identification Number, and they must sign the return and include their PTIN on the return. Do not sign the return until after they’ve signed it with their PTIN.

Ask the tax preparer about their fees before you give them your personal information. Be suspicious of preparers who charge a fee based on a percentage of the refund you get. Sometimes they take deductions you are not qualified for in order to inflate the refund, resulting in a higher fee and leaving you to pay back more money when you hear from the IRS later. And make sure any direct deposit refund is going into your own bank account rather than the tax preparer’s.

Be careful after you file your return. The IRS will not e-mail or call you asking for personal or banking information before you can receive your refund. See the IRS tax scam alerts page to keep up with the newest schemes.


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