Who Will Prepare Your Taxes? | Chillicious | All About Finance

Preparing an income tax can be a headache. If doing the computation is beyond you, it is time to hire people to do the job.

Saving You From This Misery

When it comes time to file taxes, you can look to software or a real live person. Let us learn more about the different competence of tax experts. There are basically three categories of professional help that are available.

The Tax Preparer

The tax preparer does not have the qualification of other recognized tax experts. Mostly they have informal training through actual experience or self study and observation. These people are usually hired and trained by tax companies as temporary help during tax preparation time. These people will not cost as much as the other experts. Just keep in mind that you get what you pay for.

Enrolled Agents

These people are licensed by the IRS after having passed the competence criteria. They are also accepted by the IRS as authorized representative of the taxpayer during an audit. Enrolled agents are a step up from tax preparers, but the quality of work and knowledge varies from agent to agent. Most of the enrolled agents are diligent workers and can be relied upon to do a decent job. Sadly, the same cannot be said of some.

The CPA

The Certified Public Accountants are the real pros having gone through the proverbial eye of the needle before being licensed. They have to undergo a long preparation period and a very strict and difficult licensing process. If you have a unique or complex financial situation, you want to use a CPA to do your taxes. In fact, you should use a CPA throughout the year to not only prepare taxes, but to plan avoid paying as much tax as possible.

CPAs are paid $200 to $300 per hour, quite stiff by any standards. But then the fact of life is that you have to pay top money for premium services. While all CPAs are conceded to be qualified, get one who is ahead of the situation. A proactive CPA is going to talk to you about your life and finances. They are then going to make suggestions to significantly lower your tax bill. The result will be apparent at the end of the tax year when your tax payment savings will be more than your payment for their services.

So, who should you pick? The answer is entirely dependent upon the sophistication of your finances. If you are salaried employee earning $50,000 a year, you don?t need a sophisticated tax planner. However, if you are running or have interests in a business concern or own income earning properties, then you definitely need a CPA.

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Posted by Amy Norman on Sep 17th, 2011 and filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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