When you need professional help
Consider professional tax help if potential savings exceed the cost, or if your situation is complex enough to create audit risk.
✅ Good Candidates for Professional Help
- • Self-employment or business income
- • Rental property ownership
- • Complex investment transactions
- • Multiple states or international income
- • Major life changes (marriage, divorce, death)
- • Large charitable donations or deductions
- • Previous IRS audits or problems
- • High income with complex deductions
📱 May Be Fine with Software
- • W-2 income only
- • Simple investment income
- • Standard or basic itemized deductions
- • No significant life changes
- • Comfortable with tax concepts
- • Limited time or budget
- • Straightforward tax situation
Types of tax professionals
| Type | Education/Credentials | Services | Typical Cost |
|---|---|---|---|
| CPA | Bachelor's + CPA exam + continuing education | Full service, audits, business consulting | $200-500+ |
| EA (Enrolled Agent) | IRS exam + continuing education | Tax prep, IRS representation | $150-400 |
| Tax Attorney | Law degree + tax specialization | Complex legal issues, disputes | $300-800+/hr |
| CTEC (CA only) | 60 hours education + exam | Basic tax prep (California) | $100-300 |
| Unenrolled Preparer | Varies (no federal requirement) | Basic returns only | $75-250 |
Questions to ask potential preparers
Qualifications & Experience
- • What are your credentials? (CPA, EA, etc.)
- • How long have you been preparing taxes?
- • Do you handle situations like mine regularly?
- • What continuing education do you complete annually?
- • Are you licensed in my state?
- • Can you represent me before the IRS?
Process & Communication
- • How do you typically communicate with clients?
- • What's your process for preparing returns?
- • Do you review returns before I sign them?
- • How do you stay current on tax law changes?
- • What software do you use?
- • Can you handle electronic filing?
Fees & Services
- • What are your fees for someone like me?
- • Do you charge extra for e-filing or state returns?
- • What's included in your base fee?
- • Do you offer year-round tax planning?
- • What if I get audited—will you represent me?
- • Can you provide a written fee agreement?
Major red flags to avoid
⚠️ Warning Signs
- • Promises unrealistic refunds: "I'll get you a bigger refund than anyone else"
- • Bases fees on refund size: Percentage-based fees are unethical
- • Won't sign returns: All paid preparers must sign and include PTIN
- • Suggests fake deductions: Claims you can deduct things you clearly cannot
- • Refuses to provide credentials: Won't show licenses or certifications
- • Deposit refund into their account: Your refund should never go to preparer
- • Guarantees "no audit": No one can guarantee audit immunity
- • Won't give you copies: You should have all tax documents
Fee structures and what to expect
Reasonable Fee Expectations
- • Simple 1040: $150-350
- • Itemized deductions: +$50-100
- • Schedule C (business): +$150-300
- • Rental property: +$75-150 each
- • Complex returns: $400-1,000+
- • State returns: $50-150 each
Fee Structure Types
- • Flat fee: Fixed price for your situation
- • Hourly rate: $100-400/hour depending on credentials
- • Form-based: Per form pricing (avoid for complex returns)
- • Value-based: Based on complexity and service level
- • Never acceptable: Percentage of refund
Finding candidates
Professional referrals
Ask lawyers, financial advisors, business owners with similar situations
Professional associations
AICPA, NAEA, state CPA societies have "find a professional" tools
Online directories
IRS directory of preparers, Better Business Bureau, Google reviews
Local small businesses
Solo practitioners or small firms often provide more personal service
Working effectively with your preparer
What to Bring
- • All tax documents (W-2, 1099s, K-1s)
- • Prior year tax return
- • Receipts for deductible expenses
- • Mileage logs and business records
- • Bank statements for large transactions
- • Closing statements for real estate
- • Investment account statements
- • List of questions or concerns
Communication Best Practices
Be upfront about your situation and any concerns
Ask questions if you don't understand something
Review your return carefully before signing
Keep copies of everything they provide
When to switch preparers
Time to Find Someone New
- • Consistent errors on your returns
- • Poor communication or responsiveness
- • Significantly higher fees without added value
- • Unwillingness to explain their work
- • Aggressive tax positions you're uncomfortable with
- • Major changes in your tax situation they can't handle
- • Retirement or leaving the profession
- • Loss of professional credentials or licensing issues
Regional considerations
🇺🇸 United States
IRS requirements
All paid preparers need PTIN (Preparer Tax Identification Number)
State licensing
Some states (CA, OR, NY) have additional licensing requirements
🇨🇦 Canada
Professional designations
CPA, professional accountant licenses by province
Tax preparation
Anyone can prepare taxes, but credentials matter for complex situations
🇬🇧 UK
Qualified professionals
Chartered accountants, ACCA members, tax advisors
Self Assessment help
Agent services for HMRC representation and filing
💡 Pro Tip
Interview 2-3 preparers before making a decision. Ask the same questions to each and compare their responses, communication style, and fee structures. The cheapest option isn't always the best value, especially if it leads to errors or missed deductions.
Frequently Asked Questions
Do I really need a CPA, or is an EA sufficient?
For most tax situations, an EA is perfectly qualified. CPAs have broader training but EAs specialize specifically in tax matters. Choose based on your needs: EA for tax-only work, CPA for business consulting or complex financial planning.
Should I use a big chain like H&R Block or a local preparer?
Chains offer convenience and standardized processes but may lack personalized service. Local preparers often provide better relationships and specialized knowledge. For complex returns, experienced local professionals are usually better.
What if my preparer makes a mistake on my return?
You're ultimately responsible for accuracy, but good preparers carry professional liability insurance and will help correct errors. Ask about their error policy upfront and ensure they're willing to represent you if problems arise.
How early should I start looking for a tax preparer?
Start your search in summer or fall, before tax season gets busy. Good preparers may not accept new clients during peak season (January-April), and you'll have more time to research and interview candidates.