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How to shop for Tax Preparation Services
The tax prep process can be challenging and intimidating. It's easy to make expensive mistakes. Hiring tax prep professionals can provide substantial savings in time and hassle, not to mention money. However, tax prep services can also help taxpayers who file their own returns with software and online services that make the process more efficient. Ultimately, the tax prep services that are best for you depend on your financial circumstances – and your budget.
Types of Tax Preparation Services
There are three types of tax prep services – brick and mortar, online based or software based. In general, brick-and-mortar tax prep firms are geared toward taxpayers who do not file their own returns. Online and software based tax prep services are allow individuals to file their own returns, while providing additional support if needed.
Tax Professional Qualifications and Available Services
If you have someone else prepare your return, there are a range of professionals at your disposal. At minimum, all paid tax return preparers must have Preparer Tax Identification Number (PTIN) issued by the IRS. You should also determine whether the tax prep firm you choose is properly registered with your state's department of revenue, as well as being bonded.
It’s a plus for tax prep professionals to be registered with a professional organization like the National Society of Accountants (NSA) or hold accreditation from the Accreditation Council for Accountancy and Taxation (ACAT). Depending on your circumstances, you may want a tax prep professional who is an actual certified public accountant, a tax attorney or an enrolled agent qualified to represent taxpayers before the IRS.
- Accredited Business Accountant (ABA) – ACAT accredited accountants
- Certified Public Accountant (CPA)
- Enrolled Agent (EA) – can represent taxpayers before the IRS
- Accredited Tax Advisor (ATA) – ACAT accredited preparers with at 5+ years experience
- Accredited Tax Preparer (ATP) – ACAT accredited preparers
Available Tax Preparation Services
Many tax prep firms have a range of tax prep professionals on staff, and can handle returns ranging from very simple to complex. Others have more limited services and staff. If your returns are simple, a tax prep firm that focuses on obtaining the largest credits and deductions and e-filing your returns with the IRS and/or your state can be relatively inexpensive. On the other hand, taxpayers with complex returns or who are facing audits or other challenges from the IRS should insist upon – and be prepared to pay for – a tax prep firm with CPAs and tax attorneys on staff, along with professional filing related services.
- Audit Support – varies from help with responses to the IRS to audit representation
- Automatic Error Detection – detects common math and preparation errors
- e-File Included
- State Tax Returns Included
- Tax Deduction Finder
- Tax Prep Services
Tax Preparation Fees
Many tax prep firms accept credit card and debit card payment – especially those based primarily or wholly online. Tax prep services that operate out of brick and mortar environments may also accept checks. If you're expecting a tax refund, you may be able to pay for tax prep services through a deduction from your refund.
Recommendations and Complaints
It's a good sign when a tax prep firm proudly displays reviews from satisfied customers on its website or through social media. Third party reviews such as Consumer Reports also represent a good source for objective evaluations for tax prep firms you may be considering. You should also check out consumer watchdog organizations such as the Better Business Bureau to ensure that the tax prep firm you choose hasn't been plagued with serious complaints.