April 16 is the deadline to file your taxes. But if this is the year you intend to hire a tax preparer, circle March 15 in red instead.
Come knocking any later and you'll probably be turned away or be asked to file an extension. That's because many tax firms say they're struggling to find enough experienced workers to handle all the tax returns by this year's filing deadline of Monday, April 16.
"I certainly wouldn't recommend that anybody wait until March 15 to find a relationship," said Cindy Kenyon, a partner with Shilling & Kenyon Inc. in San Jose, Calif. That means lining up a preparer and pulling together the records to get your return started.
"The more sophisticated your return is, the more imperative that you start earlier."
The problem is, many taxpayers aren't certain they need help or are ashamed to seek it.
"Take a look at what you're doing and ask, 'Am I going into any areas where I could reasonably expect trouble?' " said Charles Jaffe, author of "The Right Way to Hire Financial Help."
"If you mess up your taxes badly enough, you can go to jail. There's no great pride in doing this yourself if you're going to do it wrong."
If you decide to seek help, the first step is to determine which kind of tax preparer you need, a decision that can involve understanding an alphabet soup of professional credentials. There are three basic choices:
l Certified public accountants have passed a state CPA exam and acquired a range of accounting experience. Many specialize in tax preparation and financial planning, but others focus on consulting, audits or finance.
l Enrolled agents are licensed by the Internal Revenue Service. They have either worked for the IRS at least five years or have passed a comprehensive IRS exam. Jaffe describes EAs as "possibly the most under-recognized specialist in any of the advisory fields."
"Enrolled agents deal with virtually nothing but tax," Jaffe said. "I know plenty of CPAs who no longer do tax returns. An enrolled agent is a good compromise for a lot of people."
l Tax preparers who work for chains like H&R Block generally are trained and certified by their employer. Those who hang out their own shingle may have credentials from financial-planning organizations, or none at all. It's wise to verify credentials before signing on.
If you expect to tread into gray areas of tax law, keep one thing in mind: Only CPAs, EAs and tax attorneys can represent you in an audit.
To get started, ask friends, co-workers and business advisers for referrals. Keep in mind, though, that your acquaintances might not face the same tax issues. For example, a tax pro might be top-notch at handling self-employment issues, but not savvy about how to help you wrestle with the Alternative Minimum Tax triggered by incentive stock options.
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