Types of Tax Return Preparers
Tax return preparation may be time-intensive, challenging, and downright maddening. When there is other work to be done, taxes seem to never get erased from of the to-do list. In any case, filing those taxes is necessary, and the safest way to do it is hiring a professional tax preparer. Keep in mind that even minor errors can be costly and troublesome; but with an expert, you can avoid them.
The question is, which expert will it be? There are many types of professionals out there who are more than glad to help people with their taxes. Here’s a list of the most common designations you will encounter:
Certified Financial Planner (CFP)
A CFP should meet particular education requirements, pass a test, be experienced in finance, and satisfy other specific qualifications. There are CFPs who know a lot regarding filing taxes but not all of them do. If you are looking at someone who has this designation, find out more about their tax filing experience before you hire them.
Certified Public Accountant (CPA)
As their designation indicates, certified public accountants are people who have been certified by the government to work as public accountants. In the field of accounting, it is the one and only licensed qualification. Most individuals need to meet certain educational requirements on top of passing a series of exams, depending on the specific requirements of the state. Accounting, financial planning, business evaluation and auditing are they key services provided by CPAs. There are some CPAs who specialize exclusively in taxes.
Enrolled Agents (EA)
An enrolled agent is a person who has passed an IRS exam or was employed by the IRS employee in the past. EAs need to complete continuing education courses in order to stay up to date on changes in tax laws, and should adhere to particular ethical standards. This is the highest credential the IRS can award a tax preparation professional.
JD (Law Degree) and LLM (Master of Law)
Anyone who has these degrees may have a specialty in taxation, but this is not the case all the time. If you are planning to work with a lawyer or any other legal expert, ensure that the focus of their practice is taxes, rather than a whole variety of areas. The attorney who helped you with your divorce or personal injury case is most likely not the best choice for your taxes!
Volunteer Income Tax Assistance Volunteer
A VITA volunteer is a tax preparer who has been trained by the IRS to handle basic returns. However, if you are a business owner, this is often not the best person to approach.
Finally, If you look further, you will find that there are also many bookkeepers, accountants and unlicensed tax preparers out there who are good but do not have formal qualifications. It does not mean you should not consider them. You probably just have to dig more into their tax experience and education.
Source: Start your Tax Return