It's Tax Time. Do You Need a Professional?

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Services for Real Estate Pros with Peter Tuttle, CPA, CLCS

It's Tax Time. Do You Need a Professional?

As if the after-holiday bills aren't rolling in fast enough already, along comes tax time. You're probably as thrilled about that as the average taxpayer. With the growing complexity of tax preparation, you, like a majority of the population, are likely considering the services of a tax professional. According to government statistics, those who choose to prepare their own tax return can plan on spending an average of 33 hours to prepare an itemized tax return with interest and dividends. And those using "over-the-counter" tax software will average an additional ten hours. Surprised? When it comes to tax preparation, a tax professional may be the right choice for you.

Professional tax preparers stay current with tax law changes, are familiar with software glitches, and have knowledge about frequently overlooked deductions. Often, consulting a tax preparer not only pays for itself in the way of tax savings, and offers the comfort and security of knowing that your return has been accurately prepared.

To select a tax preparer, first determine your needs. The complexity of your tax return (i.e. such things as the sale of property, investment income, or income from the operation of a business activity) will help you determine what to look for in a tax professional. You will want someone who ensures proper tax treatment, has experience, and can optimize deductions.

Tax professionals can acquire several different designations, each one reflecting different skills. The most recognizable designations are certified public accountant (CPA) and enrolled agent (EA). Both of these credentials require the individual to earn continuing professional education.  In addition to CPAs and EAs, there are many tax preparers who either carry other designations.

Also, there are many tax preparers who either carry no designations. While most of these tax preparers are qualified, reputable individuals, be cautious and ask questions. Whomever you choose, ask for and check references. A reputable tax professional will gladly provide references. A check with the Better Business Bureau (www.bbb.org) in your area will indicate if there has ever been a complaint filed against a particular tax preparer.

What else should you look for when selecting a tax preparer? Here's a quick checklist:

• How long has the preparer been in the tax business?

• Do they have experience preparing the type of returns you need them to prepare for you?

• What type of credentials or designations do they maintain? Do they continually upgrade their knowledge through continuing education?

• Does the preparer belong to any professional organizations? Belonging to a professional organization indicates a commitment to excellence in the profession. See www.taxprofessionals.com for a list of those who belong to the National Association of Tax Professionals (NATP).

• Will the tax preparer be available after April 15 in case you have questions or are audited by the IRS?

• What do other clients say about the tax preparer? Referrals from friends and acquaintances are a great source, but references are good too; satisfied customers attest best to reliability.

• Finally, once you have enlisted the help of a tax preparer, it is critical that you check to be sure he or she has signed your return before it is submitted to the IRS.

This article is brought to you by Peter Tuttle, CPA.  You may contact me by sending an e-mail via the link to the right of the blog page.  Please visit my website at http://www.petertuttlecpa.com/

"I help individuals, families, small-businesses & non-profits with their income tax & insurance needs."

IRS Circ 230 disclosure: To ensure compliance w/ rqmts imposed
by US Treasury Regs, we inform you that any tax advice contained
in this communication (including any attachments) was not intended or
written to be used, and cannot be used, for the purpose of (i) avoiding
penalties under the IR Code or (ii) promoting, marketing or
recommending to another party any transaction or matter addressed herein.

Comments (2)

Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes
Best to get competent advice in areas you are not familiar. Better safe than sorry.
Feb 26, 2008 04:19 PM
Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN

Pete - good post. It's good to see you here.

Feb 27, 2008 03:21 AM