The research
- Why you need to be careful when choosing a CPA
- Step one: Compile a list of potential tax accountants and CPAs near you
- Step two: Narrow down your options
- Step three: Interview a prospective CPA
- Bonus step: Look outside where you live
- Sources
Why you need to be careful when choosing a CPA
Each year, the IRS compiles a “Dirty Dozen” list of tax scams. Although the list includes a wide range of potential rip-offs, many are actions taken by shady tax preparers, such as promising inflated refunds, falsely claiming deductions and credits, or encouraging clients to avoid their tax obligations.
Unfortunately, just about anyone can become a paid tax preparer. Most states have few to no requirements for certification, training, or even competency testing.
So how do you find someone you can trust? Let us walk you through a three-step process to find a qualified CPA or tax accountant near you.
Step one: Compile a list of potential tax accountants and CPAs near you
Like with most service providers, a great way to find a CPA or accountant is to ask for a referral. But don’t just go with the first name you get—compile a list of three or four potential accountants. Here’s how:
Ask people you know for a referral
“Check with family, friends, business associates, co-workers, your attorney, financial adviser, or banker,” Henn said. “Find out who they use and if they’ve had a positive experience.”
CPAs and accountants tend to focus on particular niches or specialties, such as small-business owners, high-net-worth individuals, or clients who work in certain industries. As a result, Henn recommends asking people who have similar needs. “For example, if you’re a doctor, talk to other doctors and ask who they use,” he said.
The one qualification every paid tax preparer must have is a preparer tax identification number (PTIN). Anyone can apply for a PTIN online for free, so a PTIN alone isn’t indicative of the person’s skill or experience.
However, the IRS maintains a directory of PTIN holders—such as CPAs, enrolled agents (EAs), and attorneys—who have current credentials recognized by the IRS. The directory also includes people who have completed the agency’s Annual Filing Season Program, a series of voluntary continuing education classes covering federal tax law and ethics. Search the directory by zip code to find a credentialed tax pro or CPA near you.
Check with state or national associations
Many state boards of accountancy and state CPA societies maintain online directories of members or can provide a list of tax pros in your area when asked. Not every CPA prepares taxes, so you may need to do your own research or make a call to see if the people on your list provide the type of tax services you need.
EAs are federally licensed tax practitioners who are authorized to advise, represent, and prepare tax returns for individuals and businesses. The National Association of Enrolled Agents (NAEA) maintains a directory of EAs. You can search the directory by location, specialties, language, experience, and other factors.
Consider free tax-preparation resources
If you earn less than $56,000 a year or are age 60 and older, you may want to look into having your tax return prepared through the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs.
These free programs are sponsored by the IRS and staffed by volunteers who are trained to provide basic tax-prep services to the public. If you qualify, use the VITA/TCE locator tool to find a provider near you.
According to the IRS, most VITA and TCE sites won’t appear in search results until about three weeks before they’re scheduled to open. If you search for a site outside of mid-January through April, you may have a difficult time finding one near you.
Once you find a location, check out the IRS’s list of what to bring to your tax appointment before you go.
Step two: Narrow down your options
Once you’ve made a list of potential tax preparers near you, it’s time to zero in on who’s best. Here’s what to do:
Verify their credentials
If you got the tax preparer’s name from the IRS, your state board of accountancy, a state CPA society, or the NAEA, their credentials are most likely legitimate. But if you obtained the name through a referral, it’s a good idea to find out whether the person really holds the certifications they claim to have.
Forty-seven states (plus Washington, DC), Puerto Rico, and Guam participate in CPA Verify, an online repository of information about licensed CPAs and public accounting firms. Search the CPA Verify database or your state’s board of accountancy website to verify the credentials of a CPA. You can double-check the status of an EA at EATax.org.
Read online reviews
Look at your potential CPA or tax preparer’s website and social media accounts to see what sorts of things they post. Read online reviews on Yelp, Google, Angie’s List, Thervo, and Facebook. Google their name to see what comes up—and scroll through the first few pages of search results to make sure nothing is buried.
Anybody who works with the public probably has a negative online review from a disgruntled client. But if your research uncovers red flags such as a pattern of client complaints, unprofessional social media posts, or an arrest record, move on to your next candidate.
Make an appointment
Now that you’ve narrowed down your list to the most promising prospects, reach out and ask them to meet in person as soon as possible. But be warned: If you wait to make an appointment until the 2020 tax season is well underway, you may have a hard time finding someone who has time to sit down with you. Set up a meeting in January or February, if possible, even if you don’t have all of your tax documents ready.
Step three: Interview a prospective CPA
When you meet with a potential accountant, bring a copy of your most recent tax return. Reviewing your latest return is one of the best ways for the tax pro to evaluate your situation and give you an idea of how much they might charge.
Be prepared to let your potential accountant know about any significant life changes you’ve experienced in the past year, like if you got married (or divorced), invested in rental property, or started a business.
Here are some key questions to ask during your meeting:
- How long have you been preparing taxes? If your tax return is relatively simple, someone with just a couple of years of experience under their belt should be capable of handling it. But if your return is complicated or you’ve had problems with the IRS in the past, you might want someone more experienced.
- Do you have any specialties? If you have specific needs—maybe you own a small business or rental property, or you hold foreign investments—you should hire someone who specializes in working with clients like you.
- How do you bill for your services? The accountant may not be able to provide an exact price at this initial meeting, but they should be able to give you an estimate—especially if you show them last year’s return. Find out whether they charge a flat fee or an hourly rate; either is fine, as long as you get an idea of how much it could cost to have your return prepared.
- Are you available for questions outside of tax season? Some tax preparers set up shop during tax season, only to disappear shortly after April 15. If something goes wrong after you file your return or you need help planning for next year, a seasonal tax preparer won’t be much help. Look for someone who’s available year-round.
- Who will prepare my return? If the accountant is part of a firm, the person you meet with might not be the one who prepares your return—they may hand it off to a less-experienced associate and merely review their work. Though this can help keep your costs low, it’s good to know who’s actually doing the work.
Bonus step: Look outside where you live
If you don’t find a tax preparation service or CPA near you whom you feel comfortable working with, consider looking outside of your geographic location. Though many people prefer face-to-face meetings, you aren’t limited to CPAs and tax advisors in your town.
Henn said he’s worked with many clients who feel funny about sharing their personal financial information with a tax preparer in their own town, so they work with someone in another city or state. “Because of technology like Skype and Zoom, secure portals, and electronic filing, you can work with accountants anywhere in the country,” he said.
It may be time to decide how important that face-to-face connection really is to you.
No matter who prepares your tax return, remember: You are ultimately responsible for its contents. Never sign a tax return before checking that it’s accurate. If you’re not sure about something, ask the preparer to explain. When you sign your return—whether with a pen or an electronic PIN—you’re asserting under penalty of perjury that it’s complete and contains no errors.
Take the time to hire a reputable tax pro and review their work carefully to help ease your worries this tax season.
Sources
Dan Henn, certified public accountant, phone interview, December 13, 2019
