6 Crucial Questions to Ask Before Hiring a Tax Preparer

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Tax season is over for 2023, but it’s worth thinking about taxes all year long. Read on to learn what you should ask when you hire someone to file yours. 

It’s likely that you were ready to wave tax season goodbye a few months ago. Rounding up forms and trying to get in touch with your accountant (or going through the tax-filing process on your own) isn’t really anyone’s idea of fun. But you can make tax season a lot easier on yourself by keeping on top of your tax concerns at all times of the year and looking for the right tax preparer.

Sure, you can file your tax return on your own — there are a lot of great options for tax preparation software out there, after all. But if you have a complicated tax situation (say, you’re a small business owner) or would just rather outsource this aspect of your personal finances, there’s no shame in hiring someone.

Summer is actually a great time to find an accountant because we’re far enough away from the next tax season that accountants and other tax preparers likely have time in their schedules to talk to potential new clients, just like you! When you contact one, here’s what to ask so you’ll know you’ve found the right person.

1. What are your qualifications?

There are different types of tax preparers, and it’s worth asking about education, training, and certifications when you’re interviewing one. The IRS notes that any tax professional who has a PTIN (IRS Preparer Tax Identification Number) can prepare and file a federal tax return for you, but consider your needs before just accepting this bare minimum.

For example, a CPA (Certified Public Accountant) is licensed by the state, has completed college-level education in accounting, and must pursue ongoing education. EAs (Enrolled Agents) are licensed by the IRS itself. Both of these types of tax professionals will be able to represent you as their client to the IRS, in case you were audited. In short, you want to be sure you’re hiring a tax preparer with the right kind of experience and training to handle your taxes, especially if you have a complicated filing situation.

2. Do you have experience filing returns in my state and locality?

It’s important to hire someone who is familiar with the tax laws unique to your state, especially if you live somewhere that requires you to file a state tax return alongside your federal taxes. And you should also ask about local or county considerations.

As an example, I work with a CPA who lives in my state, but in a different county. Some counties were given a tax extension for filing this year due to a winter storm. My county was not on the list, but my CPA’s county was, and I had to reach out in a panic and ensure that he realized this and still needed to file my taxes by the original April 18 due date.

3. What documents and information do you need from me?

A good tax preparer will be able to supply you with a list of various documents and info they’ll need to complete your return, such as W-2s or 1099s from your employer (or clients, if you’re a freelancer), 1098s for interest statements, copies of past returns, your checking account number and bank routing number, and so on.

Also ask how you’ll be submitting these. You might need to mail them in if your tax preparer is old school, or you could be asked to fax them, scan and email them, or even upload them to a documents portal on the tax preparer’s website.

4. How do you like to communicate?

Remember how I said that taxes should be a year-round consideration? Well, it’ll certainly help in this regard if you can reach your tax professional at any time during the year. Ask how they like to communicate (phone, email, etc) as well as how often you should expect them to be in touch. If you’re a business owner or freelancer, you’ll have to pay estimated quarterly taxes, so get in the mindset of communicating more frequently with your tax preparer to stay on the right track with your tax situation.

5. How will you help me lower my tax liability?

This is an absolutely crucial question. A good tax preparer will stay abreast of tax law changes and also your changing financial situation, and be able to advise you of ways you can pay what you owe and not a penny more. And remember, you actually don’t want a big tax refund because it means you overpaid and gave Uncle Sam an interest-free loan. With how expensive everything is these days, you should want your paychecks to be as flush as possible.

6. How do you determine your fee?

Ideally, the fee you’ll pay your tax preparer is based on how complex your returns are to complete. It’s a red flag if a tax preparer intends to charge you a percentage of your refund, as that’s an incentive for them to find ways to claim credits and deductions you might not be entitled to.

April is in the rearview mirror, but keep your taxes top of mind year round to stay ahead of your obligations. Finding the right tax preparer can help, if you ask the right questions.

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