Different Types of Tax Return Professionals
Tax return preparation could be time-consuming, complex, and simply frustrating. When there is other work to finish, taxes seem to never get removed from the to-do list. Still, those taxes getting filed is a necessity, and the safest method of doing it is hiring a tax professional. Remember, even small mistakes can be costly and troublesome, working with an expert however helps you prevent them.
The question is, which expert will it be? There are many types of professionals out there who are more than glad to help people with their taxes. The following is a quick list of designations most common today:
Certified Financial Planner (CFP)
A CFP has to meet specific education requirements, pass an exam, acquire experience in finance, and satisfy other particular qualifications. Some CFPs know much about filing taxes, but others don’t. If you are looking at someone with this designation, research more about their experience as a tax preparer prior to hiring them.
Certified Public Accountant (CPA)
As their designation indicates, certified public accountants are people who have been certified by the government to work as public accountants. In accounting, this is the sole licensed qualification. Depending on certain state requirements, most people need to meet certain educational requirements besides passing a number of exams. Covered under CPA services are financial planning, business evaluation, auditing, and of course, accounting. There are some CPAs who specialize exclusively in taxes.
Enrolled Agents (EA)
An enrolled agent is someone who has passed a three-part IRS exam or worked as a former IRS employee. EAs must complete long-term education courses to remain up-to-date on tax law changes, and are required to follow certain ethical standards. This is the highest credential any tax preparer can be awarded by the IRS.
JD (Law Degree) and LLM (Master of Law)
Any person with these degrees may have a taxation specialty, but this is not true in all cases. If you must work with any legal professional, make sure they focus their pratice on taxes and not a whole range of areas. An attorney who can help you with a car accident or divorce is probably not your best choice when it comes to your taxes!
Volunteer Income Tax Assistance Volunteer
A VITA volunteer is a tax preparer who has been trained by the IRS to handle basic returns. If you are a business owner, however, this individual may not the best person for you to approach.
Finally, looking further, you will find that a lot of bookkeepers, accountants and unlicensed tax professionals who do a great job but have no formal qualifications. It does not mean you should not consider them. You probably just have to dig more into their tax experience and education.
Source: Tax Return