Choosing a Tax Preparer – What to look for and look out for – part one

 There are numerous issues to consider in choosing the best tax preparer for your situation. For this reason, we have broken this article into two parts.
Qualifications to Do Your Taxes
Enrolled agents (EAs), certified public accountants (CPAs) and attorneys are the only ones approved for tax preparation and representation before the IRS. EAs are eligible as the result of passing a rigorous exam and background check, or having qualifying experience as an IRS employee. Every three years, EAs must complete 72 hours of continuing education.
CPAs are licensed by the California Board of Accountancy. They have received an accounting degree and met experience and character requirements established by this Board. CPAs must remain in compliance with state ethical standards and complete continuing education requirements to retain active status.
Attorneys in California are licensed by the State Bar. Some attorneys focus on tax preparation and planning.
Preparer Tax Identification Numbers (PTIN)
The IRS requires all tax preparers to have a valid 2016 PTIN. The IRS’s Directory of Federal Tax Return Preparers lists all qualified tax professionals.
State Requirements
Although Federal Income tax laws are uniform for citizens of any state, California has some specific filing requirements. For example, if you own real estate or a business in California, or are the beneficiary of a trust, you need special guidance. Make sure your prospective tax professional has the knowledge to handle your filing requirements.
Health Insurance Penalties.
Under the Affordable Care Act, those who decline health coverage must pay annual penalties to the IRS. However, some prepares have been telling clients they must pay penalties even when having coverage through MediCare, Medi-Cal or employment. In truth, they don’t have to. These preparers advise their clients to pay them directly and keep the money. All penalties tax payers owe should be made with their tax return.
IRS endorsements
The IRS does not endorse qualified preparers. The agency only recognizes the categories described herein to represent their clients before the IRS. Tax preparers are not permitted to use the IRS’s name or initials within their own names, or include the IRS or Treasury Department seal in their advertisements.
If you have questions concerning selecting a tax professional, we welcome you to contact us.
Professional Tax Services is a locally-owner provider serving over 3,500 local residents and businesses. For more information call 661-259-1967 or visit www.scvprotaxservices.com. Through their EZ2 Thrive program, they provide unlimited complimentary tax planning advice to their clients.