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How to Find the Right Tax Advisor

How Do You Know if You Need a Tax Advisor?

Navigating tax planning and preparation can be daunting. If you find it challenging to manage your taxes, a tax advisor can be invaluable. Here are some scenarios where you might need professional help:

• Business Ownership or Self-Employment: Managing taxes for business income can be complex. A tax advisor can help you track income and expenses, and manage deductions like home office expenses.
• Investment Income: A tax professional can assist in accurately reporting capital gains, dividends, and interest, and offer planning tips to save money.
• Major Financial Events: Life changes like inheritance, marriage, adoption, or working abroad can impact your taxes. A tax advisor can help you navigate these changes.
• Itemized Deductions: If you itemize deductions for mortgage interest, medical expenses, or charitable donations, a tax advisor can help you comply with IRS rules.
• Confusion or Overwhelm: Ensuring your tax return is accurate is crucial to avoid penalties. A tax advisor can help you get all the tax breaks you’re entitled to while adhering to IRS requirements.

4 Steps for Finding a Tax Advisor

Finding a trustworthy tax advisor involves several steps:

1. Get Referrals

Start by asking friends, family, or colleagues for recommendations. Personal referrals can increase your chances of a positive experience.

2. Search Online

Consult professional associations or your local chamber of commerce. Useful resources include:

• American Institute of Certified Public Accountants (AICPA): Find a CPA using their online locator.
• National Association of Enrolled Agents (NAEA): Search for an enrolled agent in your area.
• State or Local Bar Association: Get referrals for tax attorneys.
• Local Chambers of Commerce: They may have referrals for CPAs or tax preparation services.

3. Check the IRS Directory

Verify a tax advisor’s credentials through the IRS directory, which lists preparers with IRS preparer tax identification numbers (PTINs) and other credentials.

4. Follow Up

Contact potential advisors to learn more about their experience and process. Check online reviews and the Better Business Bureau for additional insights.

What to Ask Your Tax Advisor

Prepare a list of questions specific to your situation. Consider asking about:

• Background and Experience: Understand their credentials and how long they’ve been in the field.
• Specialization: Some advisors specialize in certain industries or types of income.
• Tax Preparation Process: Learn about the information and documents needed, and whether the process is secure.
• Fee Structure: Ensure transparency in fees to estimate costs in advance.
• Audit Representation: Confirm if they can represent you in an IRS audit.

Signs of a Good Tax Advisor

A reliable tax advisor will have:

• Experience: Familiarity with tax laws and applicable deductions.
• Communication Skills: Ability to explain tax concepts clearly.
• Integrity and Ethics: Secure handling of your information and adherence to tax laws.
• Availability: Time to meet and complete your return before deadlines.
• Planning and Advice: Proactive tax planning throughout the year.

Warning Signs of a Bad Tax Advisor

Be cautious of advisors who:

• Won’t Sign Your Return: They must sign and provide their PTIN.
• Ask You to Sign a Blank Return: Always review your completed return before filing.
• Base Fees on Refund Size: This can incentivize improper deductions and credits.

Consider Free Tax Preparation Options

If you have limited income, are disabled, or are age 60 and older, free or low-cost tax preparation help may be available. Options include:

• IRS Free File: Free guided tax preparation software for those meeting income guidelines.
• IRS Direct File: A tax preparation app for direct filing with the IRS.
• Volunteer Income Tax Assistance (VITA): Free tax help for eligible individuals.
• Tax Counseling for the Elderly (TCE): Free tax help for those 60 and older.
• Military OneSource MilTax: Free tax services for military members and their families.

The Bottom Line

Finding the right tax advisor can make tax season less stressful. Take the time to seek referrals, verify credentials, and ask the right questions to ensure a good fit. For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. We’re here to help you navigate your financial journey with ease.