Finance Blog
2011 Tax Filing Help: How to Select the Right Tax Pro for You
2011 Tax Filing Help: How to Select the Right Tax Pro for You
So you want to hire a tax professional to handle your taxes. You can opt for a CPA or an EA to handle your tax return, but which is the right tax professional for you—and why?
Here are the pros and cons of CPAs and EAs. (We’ll leave attorneys out of the equation, since you rarely need or want an attorney to prepare your taxes.)
CPAs—Certified Public Accountants—are licensed by their state after passing a difficult examination. Although many states offer the same master exam, some states offer their own version of the exam. CPAs are licensed to practice only in their state.
Since the IRS recognizes CPAs as “tax practitioners,” CPAs may represent all clients before the IRS, even if you live in a state where the CPA is not licensed. That’s important if you are audited, receive IRS notices, have balances due, or need your tax pro to communicate on your behalf so you don’t have to take time off from work.
CPAs must take continuing education to stay current in their profession. They don’t have to take tax-education courses; they may take all their courses in certified audits, accounting, etc. Each state has different requirements for education. There is no requirement for even one hour of tax education.
Most CPAs whose practice revolves around taxation do stay current on tax issues. Make sure the CPA you select understands the issues related to your particular situation.
One last word of advice: CPAs tend to be expensive, so shop around.
EAs—Enrolled Agents—get their authority from the U.S. Treasury Department. They must pass three intensive examinations on taxes and ethics offered by the IRS. Or they must have worked for the IRS for at least five years.
EAs practice nationally, even internationally. If you move to another state, or even another country, your EA can still work with you.
EAs complete between twenty-four and thirty hours of continuing education each year. All of it must be tax related. EAs are current on the tax laws that affect your tax return and your business.
If you need help with IRS problems like tax audits, IRS debts, tax bankruptcy, and other representation issues, EAs tend to have more expertise in these areas.
EAs are not required to take basic courses in accounting. Many do have accounting degrees and education. Unfortunately, many others do not. When seeking an EA to handle complex accounting for your business, be sure to interview the agent in depth about his or her accounting education and expertise.
Generally EAs are less expensive than CPAs—sometimes substantially less expensive, especially when it comes to business tax returns. You will receive the same level of tax expertise—or higher—for a lower price.
Overview
In all cases, select someone to work with you for the long term. Establish a relationship with your tax professional so that he or she can help you plan for your finances, taxes, and business growth.
Be aware that not all tax professionals are familiar with employee stock options, discharge of debt, Section 1031 exchanges, and other uncommon activities. When it comes to one-shot transactions, any good tax pro will do the research or consult someone about your situation. However, if you are always engaged in complex financial activities, hire someone who understands your needs—or can keep up.
Most of all, select someone who communicates with you. If a tax pro makes you feel stupid, that is the wrong tax pro for you.
Weird Taxes Affecting You Right Now
Estate Tax Update: How Will the Estate Tax Affect You?
The Nanny Tax: How to Pay Nannies, Babysitters, and Home Help
Tax Repercussions of Divorce
Tax Consequences of Unemployment
1 comment
Leave a Comment
We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.
Some other factors to consider when commenting:
- Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
- All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
- We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
- Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
- Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
- Stay on topic. Your comment should be concise and pertain to the specific post in question.
- Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
- Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.
RSS Feeds
DON’ DELETE THIS! Your site has a lot of great stuff. I hate to even mention IRS, but if you have tax problems there are only two guys that even count? Check them out. They will take care of you and your readers!