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5 Important Steps before Hiring a Tax Accountant

Personal Tax

Hiring a tax accountant can make your tax filings accurate, quicker, and more efficient. Find 5 crucial steps to follow before hiring a new tax accountant for your tax returns in 2022.

Accounting for your finances is essential whether you own a business or not. Keeping an eye on your monthly expenditure helps determine your financial health and long-term sustainability.

You can always use accounting software to keep track of your finances and your tax payments, but something other than the software is a match for a tax accountant. Indeed, the software is quicker and generally more precise, but there needs to be a logical understanding and insight into this software. It is why most people prefer personal tax preparation services.

You don’t necessarily need a magnificent net worth or extensive wealth to hire a tax accountant or a tax planning advisor. Doing your taxes may be too stressful or confusing because there are various problems you may face while tracking your taxes. These can include:

  • Paying off a tax debt
  • Filing back taxes
  • Fighting an IRS audit


5 Important Steps before Hiring a Tax Accountant

You can always figure these problems out with time, but it takes time. In these circumstances, finding the right accountant shouldn’t be a big problem if you understand the kind of person you want to hire. We have listed the five essential steps before hiring a tax accountant to make it easier.

1.Look for Tax Accountants in the Right Place

Finding a professional tax accountant should be easy. It is because there are a lot of them in the market. Some tax accountants may claim they can handle all kinds of tax-related problems.

However, you don’t want to hire someone with little to no experience with tax accounting and handling. At the same time, you don’t need a tax expert to understand and comprehend the tax-advantaged savings options.

The most innovative way around this problem is asking around for referrals and hiring tax accountants someone in your social circle has had prior experience with. You can always ask professionals like attorneys, business owners, and financial advisors, but it’s not wise to rule out your peers.

Understand that almost everyone files taxes, so finding a tax accountant referral isn’t going to be too challenging.

2. Determine the Legitimacy of the Accountant

You’ll find a variety of tax accountants who claim to be “professionals” with excellent (almost unrealistic) benefits of tax filing. For example, some so-called tax accountants may offer a giant refund right after filing your taxes. It could be a serious red flag if they make tall claims without assessing your financial situation. Similarly, a tax accountant that cuts off a lot of expenses before discussing it with you may also not be the best option.

Remember that these accountants can only accept the payment for tax filing after they have a preparer tax identification number (PTIN). It is provided directly by the IRS, which you should always ensure before the tax accountants file your taxes.

If a tax accountant fails to meet these requirements, makes false claims, or tries to overcharge you, it’s a clear sign to steer clear from them.

3. Find Someone with Knowledge of Taxation and the Legislature

Tax filing is simple if your professional tax accountant understands it well. Non-professional individuals and business owners may need help to complete their tax filing requirements.

However, a professional in the industry knows the ins and outs pretty well. The tax planning advisor usually checks on all the latest developments in the world of taxation. If you find a professional with all the latest legislation updates, you can sit back, relax, and let the professional tax accountant manage your tax filing.

Even personal tax preparation services focus on assessing individual clients’ financial situations and finding the best tax filing solutions for them accordingly.

4.Check if your Tax Accountant is Friendly and Ethical
Assessing and understanding taxes can be overwhelming for most first-time tax filers. They need to learn how things work and have a tax planning advisor. You wouldn’t want to feel dumb because you do not fully understand how your taxation works.

Therefore, it’s significant to find a friendly and ethical professional. You should be open enough with them to discuss any of your tax-related concerns properly. However, this friendliness should still be ethical and within professional limits.

As a client, you should be comfortable talking to your professionals about any tax reservations you might hold back. You can also clear out any news that you hear about taxation. After all, the advisors will be charging you a fee for their time.

It becomes challenging for most professionals to do this if they don’t have a friendly bond with their tax accountant. Moreover, a friendly connection with the tax advisor provides the clients the mental freedom to assess and resolve any mistakes they might have made in taxation earlier.

In addition, your tax advisors’ ethical work matters because they should give you illegal recommendations or “shortcuts,” even with their personal tax preparation services.

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5. Pick the Right Kind of Tax Accountant
Since business owners and individuals have to file for taxes, you’ll find professionals handling tax filing. You can pick various professionals for your subsequent tax filing, for instance:

●  Enrolled Agents

Enrolled Agents (EA)s are considered the elite tax accountants considering IRS standards. These professionals have certifications and qualifications while passing background checks directly by the IRS.

These professionals specialize in certain tax situations and problems, making them best for the most complex. An EA tax planning advisor usually helps with multi-million tax filings and is hired by organizations.

●  Certified Public Accountants (CPA)s

CPAs are professionals who have passed the uniform CPA examination and have state-based licenses for operations. They have university degrees and relevant experience within their domains. CPAs can handle tax issues and present your case to the IRS if there’s a complication.

●  Tax Attorneys

Tax attorneys are trained professionals that focus on tax laws. These professionals have certification from state bar associations and state courts. Moreover, professionals are ideal for complex cases or presenting cases against the U.S. tax court.

Bottom Line

Hiring an accountant as a tax planning advisor can help you file taxes better, avoid mistakes, and enjoy better benefits. These tax accountants are ideal for individuals and organizations, depending on the kind of tax pro you hire. Take the time to understand tax filing better and pick the right tax advisor accordingly.

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