Today TaxMama® wants to talk to you about getting your tax returns done – and where to get help.
Dear Friends and Family,
It’s the height of tax season. And this year, there is a lot of confusion about a variety of issues. More than ever, you may need the help of a tax professional. Where can you get help preparing your tax returns?
Did you know that only 3 states actually have testing, licensing and continuing education requirements for tax professionals? Yup! Only California, Maryland and Oregon. The other 47 states, DC, and US territories have nothing. In fact, there are over 400,000 tax preparers registered to file tax returns electronically who are unregulated (over 57% of all preparers).
So how can you ensure that your tax professional IS a professional and is up-to-date on current tax laws, especially in states without licensing?
First, start with a credentialed tax professional – there are three: Enrolled Agents, Certified Public Accountants, and Tax Attorneys. Then there are the licensed tax pros in CA, MD and OR.
To encourage the uncredentialed tax pros to take classes and to stay up-to-date, the IRS established a voluntary program. After completing 16-18 hours of courses, and for some candidates, a 100-question annual examination, they can get an Annual Filing Season Program (AFSP) Record of Completion. Only 50,951 tax pros out of the 400,000 tax pros without credentials have taken the courses. That means, over half the tax pros in the country have no license, and might not have bothered to keep up with changing tax laws.
The IRS’s directory of tax professionals will help you look up your tax pro. You will be able to see if their license, credential or AFSP is in good standing. You will be able to locate them by name or ZIP code. But you will not find and address or contact information for them. (The 350,000+ unlicensed and un-AFSP’d tax pros are not in the directory.) https://irs.treasury.gov/rpo/rpo.jsf
How do you find the right person to help you? And which is right for you?
Enrolled agents (EAs) are tax specialists licensed to represent taxpayers before the IRS. The EA credential allows them to work anywhere in the nation. For tax planning and tax debt issues, bookkeeping and payroll, this is your best choice. You can find them at the National Association of Enrolled Agents (NAEA), https://taxexpert.naea.org/
Certified public accountants (CPAs) are authorized to perform certified audits and issue financial statements. If you have a complex business and need much more than just tax returns – work with a CPA. You can find them the American Institute of Certified Public Accountants (AICPA), https://www.aicpa.org/feedback/shortfb.htm
Tax Attorneys are excellent choices if you need to create trusts, set up contracts and minutes, or deal with courts or criminal issues. They are usually too expensive for routine tax returns. You can find them at the American Bar Association https://www.americanbar.org
To decide if you’re better off preparing your own tax return, or working with a tax pro, read chapters 3 and 4 of Deduct Everything! https://deducteverythingbook.com/
If you’re in business, you will find more details about building an advisory team in chapter 1 of Small Business Taxes Made Easy. https://yourbusinessbible.com/
Please drop by MarketWatch.com and the TaxWatch columns for more tips.
To make comments and toss in your own ideas, please drop into the TaxQuips Forum.
And remember, you can find answers to all kinds of questions about tax filing and other tax and business issues, free. Where? Where else? At www.TaxMama.com.
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