A Pair of Helping Hands: 5 Different Types of Tax Preparers and How They Can Help You

A Pair of Helping Hands: 5 Different Types of Tax Preparers and How They Can Help You

tax preparer

There isn’t much that’s certain in life – except of course, death and taxes. While it’s disputed where this quote originates, it isn’t disputed that it’s pretty much true – all of us will one day pass on from this world, and all of us are going to be subject to taxes until then. Avoiding these could leave you in serious trouble, possibly even facing prison time.

The thing is, nobody wants to pay more tax than they should. To accomplish this most of us could benefit from hiring a tax preparer, such as Gudorf. This type of service can help us figure out our exemptions and allowances better than we could ourselves, leading to significant savings in tax payments. There are different types of preparer though, so which should you choose?

1. Basic Tax Preparers

The most basic tax preparers are those with very basic qualifications, or none at all. Some states legally require any preparers to have a minimum level of qualifications, but other states don’t have minimum requirements at all. This is the cheapest type of preparer and should only really be used if you have no idea how to do taxes yourself and aren’t inclined to learn.

2. AFSP (Annual Filing Season Program) Preparers

AFSP preparers participate in refresher courses annually and must have a minimum level of qualifications. This is a good level of tax preparer for most people, being of a similar level to state-certified preparers. They are also able to represent you in specific situations and hearings, so they cover a bigger area than the basic tax preparers.

3. Enrolled Agents

Enrolled agents (EA’s) have to pass background checks, qualification checks and participate in ongoing training. This level of preparer can represent you in any and all tax hearings. These guys are just slightly below the level of a CPA though they are close. The cost for an EA is a fair bit cheaper than a CPA though. This type of preparer can handle the entire tax process for you, making them a great choice for busy people who stand to make significant savings on yearly taxes.

4. CPA’s (Certified Public Accountants)

CPA’s are usually the choice for most business owners and high flyers. For many of these, an EA would actually be better.  They would be better for specific customers who have advanced needs when filing tax returns. The advantages of a CPA is their ability to handle accounting and other financial matters outside of taxes too, making them a one-stop facility for your financial needs.

5. Tax Attorneys

Tax attorneys are obviously the most knowledgeable people in this sector. Their job is literally to know, understand and apply tax law. These guys may be expensive but for big payers they could really reap some rewards, as they are able to figure out every angle and loophole to reduce your yearly tax payments. Often they’re so expensive that they tend not to be used for tax returns alone, though if you have legal issues around a tax case, they can be invaluable. Likewise if you have one on staff anyway and are a big tax payer, it can be worth getting them to take a look at your returns.