Do you ever wonder whether you’re making the right choice or maybe have buyers remorse after it’s too late? We’ve all been there, including me.
Today, I wanted to shed some light on what to consider when choosing a tax preparer, if you don’t prepare your own tax returns.
And by the way, I’ve come to live by this rule; if I don’t know how to do it myself, hire a professional. I do that with my car, with improvements on my home, etc. And seriously, the biggest one is …if you don’t know the tax laws, hire a specialist. One of my biggest mistakes is always to think that I can do it cheaper. After the headaches, the re-do’s, the additional time that I didn’t have all added up to..I could have hired a professional and it would have been done faster with less stress. And, I could have been working earning the money to pay for the thing that needed to be done. So my lesson…if I were to calculate my hourly rate times the number of hours it took me to complete, did I lose or make money.
So after the hustle and bustle of the Holiday’s, it’s time to get down to the truth of what do you want for 2016.
Do you want another year of just getting by? Or how about the attitude of I’m doing something different because I want more out of my life?
As you go about selecting a person to prepare your taxes, ask yourself, what do I need this person to help me with. You see not all tax preparers are the same. There are actually three different levels of tax preparers but many people don’t know the difference. I want to explain the difference so you know what to look for and ask the right questions.
Enrolled Agents (EA) are licensed by the IRS. Enrolled agents are subject to a suitability check and must pass a three-part Special Enrollment Examination, which is a comprehensive exam that requires them to demonstrate proficiency in federal tax planning, individual and business tax return preparation, and representation. They must complete 72 hours of continuing education every 3 years. You will typically find them in public practice or companies like H & R Block or Liberty Tax. Many will not know the accounting side of your business can affect your taxes. They only know the tax laws and how to complete the tax return.
Certified Public Accountants (CPA) are licensed by the individual state boards of accountancy. Certified public accountants have passed the Uniform CPA Examination. They have completed a study in accounting at a college or university and also met experience and good character requirements established by their respective boards of accountancy. In addition, CPAs must comply with ethical requirements and complete specified levels of continuing education in order to maintain an active CPA license. CPAs may offer a range of services including the accounting side of your business in conjunction with tax preparation and planning.
Tax Attorneys are licensed by state courts, the District of Columbia or their designees, such as the state bar. Generally, they have earned a degree in law and passed a bar exam. Attorneys generally have on-going continuing education and professional character standards and the Tax attorneys may offer a range of services in taxation related to business, real estate, and estate planning.
Now that you know the difference and you’ve examined about what you want to have for the upcoming year. One of the greatest mistakes is when you think that you’re saving a few hundred dollars. That savings could translate into saving thousands of dollars in taxes when you hire the professional and you’ve lost the benefit of doing the tax planning for next year and many years to come.
Make the choice that’s right for a better 2016!
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