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How to Choose a Tax Preparer
May 10, 2022
Young diverse couple speaking with potential tax preparer

Who does your business’s taxes? Perhaps you still do them yourself. Maybe you use the services of a relative who happens to be an accountant.

No matter what your scenario, there comes a time when you should consider hiring a professional tax preparer.

A tax preparer for a small business is more than just a numbers cruncher—he or she should be a specialized advisor. A good tax preparer will not only prepare and file your taxes, but also display a thorough understanding of your industry, offer you advice on how to make the most of your tax deductions, and explain how different legal structures for your business can help you save money.

A licensed attorney, a certified public accountant, or an enrolled agent are all qualified to do tax preparation. Some states have licensing requirements for anyone who prepares tax returns for a fee; some have them for fee-based preparation of state tax returns only.

As far as preparers of federal tax returns, the IRS requires enrolled agents, CPAs, and attorneys to have a Preparer Tax Identification Number (PTIN). This is an identification number that all paid tax return preparers must use on U.S. federal tax returns or claims for tax refunds submitted to the IRS.

To find a qualified tax preparer, start by asking local business owners who do their taxes and if they’re satisfied with the person. Make sure to ask for suggestions of tax preparers with experience in your industry, if possible. Before meeting with any candidates, the IRS suggests you understand the requirements for a tax return preparer, including credentials and qualifications. Make sure you know what tests they take, how often they need to take courses to refresh their education, and what practice rights are allowed.

After you’ve narrowed down your list of possibilities, ask the candidates for references and check them. Talk to several references to determine if there are any concerns, such as whether the person is hard to get in touch with or has any personality traits that could cause conflicts. Also, check online reviews such as those on Yelp to see if any glaring criticisms stand out.

Once you’re ready to meet with a prospective tax preparer, here are some topics to discuss:

  • Payment. Try to get a clear understanding of the cost early in the process. You can minimize your costs by making sure your tax prep documents are well-organized and your accounting system is up-to-date.
  • Communication. Ask what is the best way to get in touch with the person in case you have a question or concern. Whether it’s text, email, or phone, how soon can you expect to hear back?
  • Personal touch. Sometimes, you may be dealing with multiple people from the tax preparer’s office. It’s important to meet and talk with the person or people who will actually be handling your account.
  • Follow-up. Find out if your tax preparer will suggest ways for you to save on taxes next year or if he or she will contact you later if there are any new tax changes that could affect your business.
  • E-file. Make sure your preparer offers the IRS e-file option. Paid preparers who do taxes for more than 10 clients generally must file electronically.

Finally, once your taxes are completed, review your return before signing it, making sure the preparer has included his or her PTIN number on your return. Never sign a blank tax form. Any tax preparer that asks you to do so should not be rehired.

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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

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