Ready or not, it’s time to start thinking about filing your 2012 taxes.
By choosing the best tax preparation option for your situation, you can prevent major headaches and stress on April 15th.
You have several options in filing your taxes. You can file taxes yourself, use a national tax preparation chain, or hire a licensed tax preparer like an Enrolled Agent (EA) or Certified Public Accountant (CPA).
The best choice for you depends on a number of factors, including the complexity of your financial situation, your filing status and whether you want to plan ahead for next year’s taxes. Let’s examine the options:
Do-It-Yourself Filing: Filing taxes yourself is a convenient option for those with very basic returns, such as filing as an individual with only one or two W2s. The IRS website offers links to a number of e-filing options for individuals (www.irs.gov).
You can also use tax preparation software, but these programs can be confusing with complicated tax jargon. If you’re going to purchase tax software, it may be easier to invest in a personal tax preparer who can answer your questions, navigate tax laws and offer advice for your tax situation.
National Tax Preparation Chains: A national tax preparation chain will prepare your taxes and file them on your behalf for a fee. However, if your tax situation is complicated, be wary: Tax preparers for these national chains are only required to take a basic tax preparation training course. Given this consideration, your preparer may not have the intimate knowledge of tax law necessary to give advice for your particular tax situation. This option may be a good consideration for basic, uncomplicated returns.
Enrolled Agents (EAs): Enrolled agents are federally recognized tax preparers. To become an EA, one must either take a written exam based on tax matters or have the required past experience with the IRS. EAs can work with a national tax preparation chain, a private tax preparation firm or be self-employed. If your return is complex but you don’t need comprehensive services like asset protection or financial planning, an EA may fit your needs. Do your research as agents will have varying degrees of actual tax preparation experience.
Certified Public Accountants (CPAs): On any given day, a CPA’s roles might include tax preparer, accountant, financial advisor, strategist and planner. CPAs are licensed by state and are usually required to have a bachelor’s degree and work experience in public accounting, and must also meet ongoing education requirements. With knowledge in subjects like accounting, income tax, general business, economics, and business IT, CPAs are equipped to prepare individual and business taxes, address tax problems based on accounting issues and provide strategic advice for your financial situation.
If your tax return is complicated, or you have questions about planning ahead, or you want a year-round financial advisor, a CPA may be the best tax preparation solution for you. Their rigorous credentialing ensures CPAs are knowledgeable about the latest changes to tax laws, codes and regulations.
A good CPA doesn’t disappear after April 15th. They are a year-round financial advisor who will provide personalized service that benefits their clients come tax season. An experienced and qualified CPA builds a relationship with you, educates you about tax planning options, and helps you make the best financial decisions for your situation.
Nona S. Solowitz is a Certified Public Accountant and the founding owner of Nona S. Solowitz CPA, a firm that specializes in personal and small business tax preparation and planning. For more information, call (760) 423-0133 or visit SolowitzCPA.com.
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