Hiring a Tax Accountant or Service
Approximately half of Americans use a tax preparation service of some type. Three-quarters of a million of them pay a tax preparer to complete the very simple Form 1040EZ. Many others use a preparer for the 1040 form, even though the average person is more than capable of doing it alone. Some people say they simply don't want to deal with the hassle of doing it themselves.
While it pays to use expert help if you have a complex tax situation, you can save yourself $100 to $200 or more by preparing your own return if you use the short form. Having a very complex return done professionally could cost $1,000 or more. The more organized your records are and the more information you can give the preparer about your personal situation, the less it will cost.
There are times when it's almost certainly a good idea to seek professional tax assistance — for instance, if you exercised incentive stock options, had complex investments, have a home-based business, own rental property, or had a major life transition such as marriage, divorce, having a baby, or starting your own business.
The qualifications of tax preparers vary immensely, and you'll pay more if you choose someone who is overqualified to handle the complexity level of your return. You could hire a tax attorney to do it, but is it really necessary? Certified public accountants, tax attorneys, and enrolled agents (certified by the Treasury Department) are the only professionals who can represent you in an audit if that ever becomes necessary, but you can also use other trained preparers suited to your needs.
You can search for tax professionals near you by visiting the National Association of Tax Professionals website and using the search feature. Members' names, addresses, telephone numbers, and e-mail addresses are provided.
Finding a Reputable and Skilled Preparer
Start by asking friends, family, coworkers, and other professionals for recommendations. If you can't come up with a recommendation this way, try contacting the local chapter of a professional association such as the American Institute of Certified Public Accountants (AICPA).
Once you've identified someone you'd like to use, talk to her on the phone and ask about her qualifications, background, and fees. Find out whether she works full-time or part-time doing tax consulting, how many years of experience she has, and whether she participates in continuing professional education. The latter is important because tax preparers need to keep up with yearly changes in tax laws. When you've made a decision, make an appointment well in advance of the filing deadline.
