Taxes and Seniors II – The 4 Best Tax Professionals
My name is Chris Cherico, founder, and owner of Guardian Tax Solutions, and I have been helping people with their taxes for almost ten years. Last week Doug shared some of the scams we should all be on the lookout for, and there are many. Today I will be focusing on who you should focus on for help with your taxes and resources to determine who might be the best fit for your situation.
There are many professionals in the tax arena that cannot only help prepare your taxes but also help you be in compliance with the IRS and your state. With so many choices among bookkeepers, accountants, CPA’s and Enrolled Agents, it can be hard to know where to go and who to trust. Since anyone can prepare a tax return, it’s important to understand the differences between each of these entities so you can select the professional best suited for your needs. While this is just a snippet of information, what is shared is crucial for delineating what each can and cannot do for individuals or businesses.
- Bookkeepers do just that; they keep records of the day-to-day financial transactions in a business. Normally, their responsibilities include invoicing, paying bills, and payroll. Since they are responsible for the recording of financial transactions and categorizing them appropriately, they need to have exceptional organizational skills.
- Accountants require the skills and experience in creating and maintaining accurate individual and/or business financial records. They are much like a bookkeeper in the recording and categorizing of financial records, however, they also work on strategic planning by interpreting, classifying, analyzing, reporting and summarizing financial data.
- Certified Public Accountants (CPAs) have earned a license in their state that attests to their high degree of skill, training, and experience. These individuals can address tax issues with the IRS/state, but they can only do so in the state where they are licensed. They are regulated by their state board of accountancy and must meet educational and experience requirements as well as complete annual continuing education classes.
- Enrolled Agents (EAs) are considered “America’s tax experts” and, according to the NAEA (National Association of Enrolled Agents), “are the only federally licensed tax professionals who also have unlimited rights to represent taxpayers before the IRS.” This means an EA is empowered to work with clients in all fifty states for tax preparation or representation. They are not limited to just their state of domicile.
Be sure you know who you are hiring to handle your taxes. Even within their respective categories, when it comes to experience, personality, organization and knowledge, not all are created equal. Don’t be afraid to do some research, talk to a few professionals and make a decision that fits best with your goals or desired outcomes. Below are three of the best and most respected resources to help you search for and choose a tax professional.
- NAEA: naea.org. In order for someone to be awarded the title of Enrolled Agent they must first pass a grueling three-part test in the areas of individual and business taxation and ethics or have previously been an IRS agent. Enrolled Agent status is the highest credential awarded by the IRS. Individuals who do achieve this designation must adhere to the highest of ethical standards and every three years complete 72 hours of continuing education. They must also be classified as “in good standing” with the IRS.
- Tax Buzz: taxbuzz.com. This site allows you to search their database of over 475,000 tax and accounting professionals throughout the United States. There are verified reviews, plus you can make appointments with any tax professional you choose.
- Google Reviews – This may seem like an odd source for making a decision, but everyone loves to share their experience, especially if it was a bad one. It seems people will always find the time to write a bad review, and most always delay in writing a good review. Finding a professional who has a significant number of positive reviews should help in your evaluation and selection process.
When hiring a tax professional, it’s important to be as prepared as possible, making the process more like a non-stop flight to a tropical island and less like a 3 layover red-eye delayed a few hours on your way to Indiana. The first step is gathering the appropriate tax documents to give to your tax professional. Ask ahead of time for a list of documents they will need to look over your case and/or start preparing your tax return. Here is some important information you will want to know.
- Medical expenses, including some long-term care expenses, are deductible if the expenses are more than 10% of adjusted gross income. Previously, it was 7.5%.
- Assisted living expenses can be deducted, but the resident must be considered “chronically ill.”
- Sale of your home – Retirees often sell their homes and move into a retirement community. If you have lived in your home a long time, you probably have substantial equity and will earn a large profit on the sale. Fortunately, you may not have to pay taxes on the profit. As long as you lived in your home for at least two out of the five years before selling your house, the profit you make (up to $250,00 for single taxpayers and $500,000 for married taxpayers filing jointly) is not taxable.
I hope you have found these guidelines helpful. Know that for the almost 10 years I have operated my company, Guardian Tax Solutions, and proudly been an Enrolled Agent, serving numerous clients in tax matters including IRS problems, special circumstance tax returns, lien removal and offer in compromise. I enjoy helping seniors with their tax issues, especially those suffering from dementia or Alzheimer’s. I go to great lengths to make myself available and maintain an open honest line of communication.
If you desire help in preparing your taxes or have questions regarding any other tax matter, you may call me directly at 913-302-0336 or send an email to email@example.com. Remember, as an Enrolled Agent I can work in all fifty states. I can also be found on LinkedIn, Facebook, Google, NAEA, TaxBuzz, and CountingWorks.