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Matchmaker, Matchmaker, Make Me a Match ... With a Good Tax Preparer

Liberty TaxThere are matchmaking websites galore, offering to help you meet Mr. or Ms. Right. So why not a matchmaking site to help you meet the accountant of your dreams?

For all those lonely taxpayers out there, hoping to meet someone they can trust with that shoebox full of receipts and tax forms, Prosado.com is here. It's a new online service aiming to match taxpayers with tax preparers -- because asking your neighbor for a recommendation, or enlisting the services of Uncle Ralph, may not be the right answer for you.

You click in and, without divulging much personal information, you specify how complex your return is (in terms of the number of tax documents such as 1099 forms that you have). Then you wait for bids.

Tax preparers have paid a few hundred dollars to be able to participate on the site, and interested ones will name a price for you. (They can also see what other bids you've received, and can lower theirs -- a consumer-friendly feature.) You'll be able to see ratings of preparers who bid for your business, and to rate the preparer you end up using. If you accept a bid, you have a few days in which you can cancel.

Don't dismiss the idea of using a tax preparer, even if you've been filing your own return for years. This year -- with all the last-minute changes to the tax code caused by the fiscal cliff deal -- may be the year you need to hire a professional.

A knowledgeable pro may be able to save you lots of money (and more than make up for his or her bill) by helping you take advantage of credits, deductions, or other strategies that you may have overlooked. The tax code is extremely complex, after all -- nearly 4 million words of regulations. And it changes frequently.

Other Places to Look for Help

Prosado is not your only option for finding a tax preparer. Tax-prep companies offer online directories of their preparers. Here are some handy websites: H&R Block, Jackson Hewitt, and Liberty Tax Service.

Professional organizations are ready to help, as well. Some certified public accountants prepare tax returns for individuals, and the American Institute of CPAs will help you locate one via its website. Enrolled agents are federally licensed pros who focus solely on taxes, and the National Association of Enrolled Agents has a locator service on its website, as well. The National Association of Tax Professionals includes CPAs, enrolled agents, and other tax pros, and is ready to direct you to some.

For those with low to moderate income, especially those age 60 or older, the folks at AARP offer the AARP Foundation Tax-Aide program, making available for free the services of tax-return-preparing volunteers.

Decision Considerations

So once you have a few candidates in mind for your business, how do you choose?

The folks at Prosado rightfully point out that selecting a tax preparer shouldn't be a matter of grabbing the lowest bid. Instead, you should weigh all the factors that matter to you, such as location (if want face-to-face contact), credentials, and years of experience. A low bid might entice, but there are other important factors to consider before you choose:
  • Look into the preparer's training and credentials. CPAs and enrolled agents, as well as tax attorneys, are generally the most up-to-date on current tax rules, as they're required to regularly attend continuing education sessions. Membership in professional organizations is also a promising sign.
  • Do aim for a good personality fit. And if you're looking to keep using the person's services, favor someone who's available year-round, as you may have tax questions or issues to consider during the year (such as if you're changing jobs and have a 401(k) account, or you're getting divorced).
  • Make sure you understand how much it will cost before you sign up, so that you're not unpleasantly surprised later.
  • Find out how quickly your return will be prepared.
  • Find out what happens if you end up audited later. Will the preparer represent you? (Ideally, they will go talk to the IRS in your place, instead of merely accompanying you.)
The Bottom Line

If you're going to get help doing your taxes this year, start looking soon. This isn't a relationship you want to rush into. After all, if the preparer isn't a good fit for you, or just isn't very skilled, you might end up paying far more in taxes than you have to.

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