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Everything You Need to Know About Tax Professionals
Tax Professional | Everything You Need to Know

Tax Professional | Everything You Need to Know

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If you are looking for the right way to find a great tax consultant or tax preparer, then keep reading. This article is full of valuable information, so you may want to take notes or bookmark it.

In this article, we will take a look at the definition of the different types of tax professionals, the reasons you may need the help of a tax professional or consultant, what the different types of tax professionals do, and the best way for you to find the right tax professional right now.

Did you know that just knowing that your taxes are in the hands of someone else can reduce your stress level? For this reason and many others, you should reach out to find the right tax professional for your individual tax needs.

What is a tax professional?

A tax professional is typically a person with the expertise, credentials, and hands-on experience to help you with your tax return. Tax professionals are required to stay up to date on the latest tax laws, rules, and regulations, which often change from one year to the next. 

Check out this article for more information about what a tax consultant is and how they can be of use to you.

Why do you need the help of a tax consultant?

It’s also important to have the right tax professional, so you don’t make costly mistakes and end up with an unexpected tax bill. A qualified tax preparer can make an impact on how much you owe or expect as a refund from the IRS. 

If you don’t know how to file your tax return properly, a tax professional can come in handy. They understand the different ways to give you the tax breaks that you need. Plus, in filing your own taxes, the odds of making errors is higher.

Another benefit of hiring a tax professional to do your taxes is that it can easily save you from missing deductions and reduce the odds of being audited. Tax preparers are trained in the best way to prepare tax returns.

Tax laws change from year to year, so it’s understandable if you are having a tough time keeping up with them. That’s what’s nice about hiring someone to help you file your tax return in the most beneficial way possible. A tax preparer understands the laws and keeps up with the latest tax information that you need to know.

The right tax professional may be authorized to represent you on tax matters concerning the IRS. If you think, expect, or just fear that you may get audited, having a tax professional who is there to represent you can be especially helpful. That’s why having the right kind of tax preparer for your particular situation is crucial.

Check out this article for more reasons you should hire someone to do your taxes. 

What are the different kinds of tax consultants?

For tax preparations, there are four types of tax professionals that can help you with your taxes. There are Certified Public Accountants (CPAs), Enrolled Agents (EAs), tax attorneys, and non-credentialed tax preparers.

What is a Certified Public Accountant (CPA)?

A Certified Public Accountant (CPA) can work independently, while others may work for an accounting firm. CPAs who hold state certificates are able to manage your financial accounts. Some CPAs specialize in tax accounting, while others are knowledgeable in other accounting matters. 

A CPA can typically offer sound advice on business matters, such as buying or selling a business, creating a new business partnership, helping with financial planning, and/or forensic accounting. 

To receive a state certificate, a tax accountant must pass a lengthy CPA exam so that they can become a Certified Public Accountant (CPA). Before the tax professional is even eligible to take the CPA exam, the state requires the proper education and experience. 

For more information on the qualifications that you need to take the CPA exam, check out this article by the CPA Accounting Institute for Success.

What is an Enrolled Agent (EA)?

An Enrolled Agent (EA) must pass an IRS examination, have relevant IRS experience, and pass a background check. Besides being qualified to represent you in the event of an IRS audit, they can help you prepare your taxes. 

Enrolled Agents (EAs) keep up with the latest tax laws and must meet specific criteria. Because of their experience and knowledge of taxes, they are more qualified to help with tax matters than the non-credentialed tax preparers, like the tax preparers who only work on taxes seasonally.

For more information on the qualifications needed to become an Enrolled Agent, check out this article

What is a tax attorney?

Tax attorneys specialize in tax laws. Many tax attorneys specialize in tax planning and tax preparation. They are also able to represent you in any legal tax matter or in the event of an IRS audit. 

To become a tax attorney, the tax professional must pass the state bar examination. Further, tax attorneys have ongoing continuing education and other professional standards. 

What is a non-credentialed tax preparer?

A non-credentialed tax preparer must have an IRS Preparer Tax Identification Number (PTIN) in order to prepare federal tax returns. Non-credentialed tax preparers are not qualified to represent you in the event of an audit or other legal tax matter. 

Always check the credentials of your tax preparer out before working with one. To make sure that your tax preparer is qualified, check out the IRS’s Credentialed and Qualified Preparer Directory. By simply entering the zip code and last name of the tax preparer, you can see what qualifications your tax preparer has. 

The two kinds of non-credentialed tax preparers are the PTIN holders and the Annual Filing Season Program participants. These individuals can help you with tax prep, but usually no other tax matter.

According to the IRS, the Annual Filing Season Program is a voluntary program for tax preparers who are not CPAs, EAs, or tax attorneys. These tax preparers are usually only qualified in tax return preparation. 

They cannot represent their clients in legal matters or in matters concerning the IRS, like in the event of an audit. They are able to find you the right tax credits on your income taxes, though. 

To obtain the IRS requirements to become a seasonal participant, the tax preparer must earn the Annual Filing Season Program Record of Completion and have a certain number of continuing education hours in tax preparation for a specific tax year.

To learn more about this program, check out the IRS’s page on the Annual Filing Season Program.

Finally, tax preparers who have an active PTIN are authorized to prepare tax returns but cannot represent you before the IRS. 

For more information on the tax qualifications of a non-credentialed tax preparer, go to the IRS’s website.

What is a tax consultation?

A tax consultation is a meeting with a tax professional or consultant. This meeting usually happens in their office, and some tax professionals or tax advisors offer a free initial tax consultation.

How can you find the best tax consultant?

If you are unsure as to how to find a qualified tax professional, you can start by asking around for a referral. Sometimes word-of-mouth is the best way to find someone who will meet your needs.

Whether you found the person through a referral or by flipping through the phone book, make sure you verify their background and credentials. You want someone who can fulfill your tax needs. 

Once you have some names of qualified tax consultants, consider making a consultation with each one. Be prepared before you go; you can do this by taking a list of questions and specific documentation with you to the appointment.

After you have completed all the tax consultations you had scheduled, it’s time to make a comparison chart. Compare the different types of tax professionals, their cost, and whether they meet the criteria you are looking for or not. 

Check out this article for more information on how to find the best tax professional for you. 

Conclusion

If you think that doing your taxes by yourself is the best option, be sure to review the reasons you may want to hire a tax accountant because having your taxes done by a pro has many benefits. 

In fact, did you know that you may end up saving more money than you spend by having a professional do your taxes for you? For this reason and many others, it’s just a good idea to have a second set of eyes when filing taxes.

Have you found a qualified tax professional to meet your tax needs? If you are still looking and/or realize you need help preparing your taxes, Borshoff Consulting is more than happy to be of assistance. You can trust Indiana’s tax expert to help you with your taxes. 

We do more than that, though. We also can help you with your business matters. We specialize in helping small businesses, and we can help you with your small business issues. 

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