There are as many variations as there are schedules and forms. Tax preparers may focus on international taxpayers and expats or small businesses. Some may focus on pass-through entities, tax-exempt organizations or fiduciary returns. Others are fluent in Schedules C (business) and/or E (rentals). Some tax preparers can do forms 1040-EZ in their sleep.
Have you prepared a (fill in the blank) tax return before? Remember when I said there's no one size fits all? That's because tax returns are not all the same.Ask about what they do and why they're qualified to do it. That doesn't mean you shouldn't give them a look. Other accountants, bookkeepers, and tax preparers may be able to demonstrate competence but may not have formal credentials.A Volunteer Income Tax Assistance (VITA) volunteer is trained by the IRS to prepare basic returns.Avoid a lawyer who promises to do your taxes, get you out of that DUI and help you with your divorce all in the same breath. Having a law degree or two doesn't necessarily mean that an attorney prepares returns or has tax experience (you don't have to demonstrate competence in tax law to pass the bar in most states). As with a CPA, JD candidates are required to pass an exam, an ethics exam or course and take continuing education credits.
An LLM could be focused on taxation but may not be (you could have an LLM in Trial Advocacy, for example). An LLM (Master of Laws) is a second law degree, kind of like a specialty (though ethics rules in many states won't allow you to say that). A JD ( Juris Doctor) is a law degree: having a JD means that you've graduated from law school but does not always mean you've passed the bar exam.AFSP participants who have met the criteria receive a Record of Completion and are included in a public database of return preparers on the IRS website. Those requirements include 18 hours of continuing education, (includes a six-hour federal tax law refresher course with an exam). AFSP ( Annual Filing Season Program) participants are non-credentialed return preparers who have met voluntary requirements established by IRS.EAs must adhere to ethical standards and complete 72 hours of continuing education courses every three years.
EA status is the highest credential the IRS awards. An enrolled agent (EA) has earned the privilege of representing taxpayers before by either passing a three-part comprehensive IRS test or through experience as a former IRS employee.A CPA may specialize in tax but not necessarily: there's a wide range of CPA services including accounting, auditing, financial planning, technology consulting and business valuation. Most states also require an ethics exam or course as well as continuing education credits. To qualify as a CPA, candidates are required to pass an exam. All CPAs are accountants but not all accountants are CPAs. A certified public accountants (CPA) is certified by the state to act as a public accountant.A CFP may have tax experience but tax may not necessarily be the focus of their practice. A CFP must meet certain education requirements, pass an exam, have experience in the field, pass fitness standards and pay a certification fee: the coursework and exam do have tax and tax planning components as determined by the Board. A certified financial planner (CFP) is a designation for financial planners given by the Certified Financial Planner Board of Standards.Here's a quick guide to help you sort it out in advance: So ask what those letters mean - and how they would relate to the preparation of your return. It can mean that the person has passed certain tests or has specific tax training. What is your tax background? A slew of letters following a name on a business card doesn't necessarily mean more qualified.
You can check out PTIN qualifications on your own by using the Internal Revenue Service (IRS) online PTIN directory. Without a PTIN, a tax preparer is not allowed to prepare your return - this isn't something you want to find out at the end. Anyone who prepares federal tax returns for compensation must have a valid 2016 PTIN before preparing returns.