RSS Facebook Twitter LinkedIn

Featured Advisor

Ed Meek
CEO/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, playing and following basketball, playing golf, and participating as an advisory board member for Breakthrough Urban Ministries.

Click to see the full profile

Share |

Questions to Ask Your Tax Preparer

A tax preparer's refusal to sign your tax return is a major red flag!

| BY Donald Liebenson


Among the primary benefits Affluent investors cite in regard to working with a financial advisor is peace of mind. This can be especially appreciated around tax time.

Self-directed households who assume responsibility for all financial and investment decisions may opt to use tax preparation software in the belief that their returns are basic enough to not warrant a tax preparer. They may also believe that a finance professional is too expensive, or that they could do a better job on their own taxes.

But perhaps this is the year that you just don’t have the time, patience or stress level to go through the tax preparation process. Perhaps your financial situation has become more complicated. Perhaps you want to be sure you are paying as little taxes as possible and getting the highest refund.

And so begins the search for a tax preparer. Last year, the IRS launched the Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. The directory lists enrolled agents, attorneys, CPAs, and those who have completed the requirements for the voluntary IRS Annual Filing Season Program, according to the IRS website. You may search the directory using the preferred credentials or qualifications you seek in a preparer. You may also search by a preparer’s location, including those who practice abroad.

Another useful tool is Spectrem Group’s Best Financial Advisors Search .  

Once you find a prospective preparer, whether by referral or your own research, there are several questions you should ask that can help determine if they are not only qualified, but a good fit for you and your financial situation.

The first question should be whether the tax preparer has a Preparer Tax Identification Number (PTIN). Anyone who receives compensation for preparation of a federal tax return must have a valid PTIN from the Internal Revenue Service. The PTIN and the preparer’s signature need to appear on the tax return. Refusal to sign is a major red flag.

Another key question is what licenses or designations a tax preparer has. A certified public accountant (CPA) is the only licensed qualification in accounting. Less widely known is a Volunteer Income Tax Assistance (VITA) volunteer, who is trained by the Internal Revenue service to prepare basic returns. A certified financial planner (CFP) designation speaks to rigorous education, training and testing undergone by financial planners, but it does not mean that tax preparation is a primary focus.

Other questions you might want to ask include: 

  • How long have you been in practice?
  • Have you prepared a tax return for someone in my financial situation?
  • Regarding expertise, what are your specialties?
  • What documents will you need from me?
  • How much do you charge?
  • Do you perform the work yourself or do you outsource any of it?
  • Will you provide me with a copy of my completed return and return my original documents?
  • Do you offer IRS e-file? (It is considered the safest and most accurate way to file a return).
  • Are you available throughout the year for questions or problems?
  • What happens in case of an audit? What are the costs in fixing mistakes? Are you certified to represent clients before the IRS?

It is also recommended that you contact your state’s board of accountancy to check on a prospective tax preparer’s license status or any disciplinary actions.


About the Author

Donald Liebenson

Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.  

A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.