How to Find the Right Tax Professional

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The U.S. tax code is notoriously complicated. There are professionals out there who can help you with your tax questions and quandaries, but finding the right help is a challenge in its own right. To add to the complication, there are several different types of tax professionals and there is some overlap in how they can help you. 

Which type of tax professional is right for me?

Certified Public Accountant (CPA)

A Certified Public Accountant (CPA) is a designation given to accountants who have passed the comprehensive CPA exam and met the education, experience, and ethics requirements of their state. The CPA exam covers a wide array of accounting topics, including financial reporting, auditing, regulations (including taxation), and corporate financial management—so a lot more than just taxes. A CPA could be the right fit, especially if you’re looking for help with more than just tax filing. For example, a business owner who also wants bookkeeping services, advice on their business structure, and someone to file their taxes could find a CPA who offers all of that. 

Tax Attorney 

A tax attorney is someone who can advise clients on tax law and represent them in tax-related matters. They can help with estate planning, evaluate a major business transaction, and represent clients in a dispute with the IRS. Attorneys typically charge a premium so they are not likely to be your first choice unless there is a lot of money at stake or you need help with a related legal matter such as dealing with a property lien, stopping wage garnishment, or settling back taxes. They are best reserved for specialized and complex tax help.

Enrolled Agent (EA)

An enrolled agent is a tax professional credentialed by the IRS. They must pass a comprehensive test from the IRS on individual and business tax returns (or be a former IRS employee). They are experts in how the tax code works and can represent clients in disputes with the IRS. They can also file tax returns and help with tax planning. An enrolled agent may be the right choice if your needs are solely tax-related and don’t veer into business or financial advising beyond that.

PTIN Holder

Anyone who prepares tax returns or assists in preparing tax returns in exchange for money must obtain a preparer tax identification number (PTIN) from the IRS. PTIN holders do not need to have any professional certifications (although CPAs, EAs, and tax attorneys must also have a PTIN to file taxes). Tax preparers at retail tax prep companies should all be PTIN holders. Some may have credentials beyond that (such as a CPA or EA designation) but they may just have a PTIN and training provided by their employer. These retail tax prep companies could be the right fit if your main need is filing taxes and your tax situation isn’t complicated.

How can I find a good tax professional?

Understanding the differences between types of tax professionals is just the first step. To make matters more complicated, tax professionals may have more than one of these designations; they could be a CPA and an EA, or a tax attorney and a CPA. For this reason, you will still need to do the legwork to make sure you find the best tax professional for your situation.

Get clear on what you need help with

Tax issues can run the gamut. For example, you might be looking for help with any of the following:

  • Tax preparation (annually and/or quarterly)

  • Deciding on your business's legal structure

  • Capital gains tax

  • Real estate transactions

  • Tax deductions as a freelancer or business owner

  • Retirement accounts for the self-employed

Write down your specific tax questions and needs. You can use this as a guide as you work through the following steps.

Ask for recommendations

As old-fashioned as it sounds, a word-of-mouth recommendation from someone you trust is a good first step toward finding a tax professional. For the best results, ask someone who has a similar profile as you. For example, if you’re a freelancer, asking your freelancer peers who they use is likely to lead to better candidates than asking a friend who only has W-2 income. If you don’t have an in-person network, you can also ask professional groups online or find local candidates with positive reviews.

Interview multiple candidates

Talk to at least three potential tax professionals to hire. This process will likely give you more insight into who you will work best with and whose expertise is best fitted to your needs. You will also get a sense of the candidate’s communication style, which is important if you want an ongoing professional relationship. Do they invite questions and answer them in a way that broadens your own knowledge? How often will you get to speak with them? 

Review your chosen candidate’s credentials

Although we established that there are many different types of credentials, you should check that someone is in good standing for the credentials they claim to have. 

  • CPA: Verify the status of a CPA through your state’s licensing agency.

  • Tax attorney: To verify the status of an attorney law license, search the state’s licensing or regulatory agency (most often the state bar association).

  • Enrolled agents: Verify the status of an enrolled agent through the IRS.

  • PTIN Holder: The IRS has a database of PTIN holders who also hold other credentials. To verify a PTIN holder with no other credentials, you can download a spreadsheet of all PTIN holders by state on the IRS’s website and search by name or PTIN.

Final Thoughts

Although finding the right tax professional will require some work on your end, it will be worth it for the peace of mind that you have the help you need to navigate the complex world of taxes.

Are you tired of paying so much to prepare and file your taxes? Check out H&R Block or file your taxes for FREE with CashApp taxes. Ready to take your finances to the next level? To get started, schedule a free 20-minute consultation call to speak to a member of our team. 

Kylie Lipinski, A Certified Financial Trainer