Need help with your taxes? Get a tax advisor

If you are looking for a professional to help you out, here are a few things to consider when choosing the right tax advisor.

tax advisor
Before you make a decision on a tax advisor or a tax preparer, make sure to check their history and reputation in the industry.

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Let’s face it, even if you know exactly how to file your taxes, it can be quite a tedious process. It’s probably the reason why a large number of taxpayers choose a tax advisor or tax preparer to help them file their tax returns. 

Top 5 tips for choosing a tax advisor

Look for credentialed tax advisors 

While this seems like a fairly obvious first step, you would be surprised at the number of people who don’t verify the tax advisor’s credentials. There are many who will claim to be experts but not have any proof to back it up. Look for tax preparers who have been certified by the IRS or a state regulatory board. Professionals with credentials validated by the CPA (certified public accountant) are usually a safe bet. Their certification implies they have a college degree in accounting, and also meet the ethical requirements to earn their license. 

Compare service charges 

Like you do with most goods and services that you purchase, make sure you do your research on the fees charged by the tax preparer. The cost of having your taxes done by a professional varies based on a number of factors. They include the professional’s experience, the complexity of your tax returns, and the state in which you live.   

An obvious red flag is when a tax preparer’s fee is a portion of your refund. This can make you vulnerable to some fraudulent activity where the preparer might make sketchy tax breaks to charge you a higher fee.  

Look into their track record 

Before you make a decision on a tax preparer, make sure to check their history and reputation in the industry. This is extremely important because you will be handing over sensitive information such as your Social Security number and your financial information. You can check their grade on Better Business Bureau and also check on customer complaints, violations, and false advertising. 

Get hold of their PTIN

If you are appointing a professional to do your taxes, ask them for their Preparer Tax Identification Number (PTIN). The PTIN is a mandatory requirement by the IRS for anyone who charges a fee to prepare federal tax returns. If you see the phrase ‘for compensation’ anywhere, you also have to make sure they add their PTIN on your form. 

Confirm that they will sign your tax return 

This ties back to the tax preparers PTIN. The IRS allows any tax professional to add their PTIN to their client’s tax returns. If the person you plan on hiring seems hesitant about doing so, this is a big red flag and is most likely a scam to steal your refund. 

Other points to consider while choosing a tax advisor:

  1. Make sure they provide the option of e-filing.
  2. Do not give the tax advisor any of your sensitive information before you have decided to use their services. 
  3. Always double check your bank account number in Form 1040 before you sign your tax return. 
  4. When e-filing, make sure the preparer uses Form W-2.
  5. Do NOT ever sign a blank tax return.

If at any point you learn that the tax advisor you hired is dishonest with their practices, you have to report them to the IRS. Form 14157 is submitted for issues related to changes in your returns that you did not authorize, tax violations and identity theft. 

This page is purely informational. Line does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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