Filing your taxes can be a hassle. There’s lots of room for error, and mistakes can be costly. You could end up not getting the most of your refund or even find yourself in trouble with the IRS for failing to file correctly.
That’s why many Americans leave it to the professionals when it comes to tax season. The IRS has received more than 13.4 million e-filed returns from tax professionals this year, according to its
data.
The demand for tax professionals also means that scammers and fraudsters are lining up to take advantage of you. And with cutting edge technology at scammers’ disposal, it’s more important than ever to evaluate any professional tax preparer with whom you work or plan to work.
So where do you start? The truth is, anyone can help you prepare your taxes—your dad, your friend, your neighbor, the guy on the street. But anyone who charges for these services by law must have a current preparer tax identification number (
PTIN) and be registered by the IRS.
Not having one of these is an instant red flag. Just because someone is registered with the IRS also doesn’t mean they’re not looking to take your hard-earned money.
What to Look Out For
Sometimes if it sounds too good to be true, it isn’t true.That’s why the
IRS warns you to avoid tax preparers who claim to offer unrealistically large refunds. You should especially avoid those who charge fees based on the size of your refund and those who promise bigger refunds than their competitors before even looking at your tax situation.
The IRS also says you should avoid preparers who offer to cash your refund for you or have your refund deposited into their individual accounts.
With that said, you should also make sure the tax professional uses e-file. The IRS generally issues refunds within 21 days to those who file electronically and choose direct deposit.
Moreover, you should evaluate the tax preparer on an individual level. Look the individual up on the Better Business Bureau (BBB) website to see if there have been any complaints against them. You can also look up their credentials.
Not all tax preparers with a PTIN have the same experience. Some have credentials that qualify them to do more than just tax preparation. Some are certified public accountants (CPAs), enrolled agents (EA), or Annual Filing Season Program (AFSP) participants.
The complexity of your tax situation would determine what kind of IRS-recognized professional you may want to work with. So let’s evaluate these different types.
Annual Filing Season Program Participants
An Annual Filing Season Program (
AFSP) participant is a non-credentialed tax professional who has completed an IRS program and undergone special training to prepare taxes in a given tax year.
An AFSP participant undergoes 18 hours of continuing education credits, as well as a six-hour Annual Federal Tax Refresher course and subsequent comprehension exam. They are listed on the
IRS Directory of Federal Tax Return Preparers. These professionals are best if you want to file a simple tax return. All AFSP participants have PTINs and must renew them each year to stay active. And they generally charge lower fees than CPAs and EAs.
According to the IRS, “The Annual Filing Season Program aims to recognize the efforts of non-credentialed return preparers who aspire to a higher level of professionalism.”
Enrolled Agents
Enrolled Agents (EAs) are professionals experienced in all levels of tax preparation. They work with individuals and businesses. If you have a more complex tax situation, an EA may be right for you. For example, you may be a sole proprietorship with a Schedule C, or you engaged in complicated investment transactions in the past year. In addition, EAs can represent clients during audits and appeals.EAs also need to fulfill continuing education
requirements to maintain their status.
EAs must pass a three-part IRS Special Enrollment Examination (SEE) within two years. Plus, they must pass a suitability check that looks at previous tax compliance and any criminal history.
You can verify the status of an EA via the IRS
website.
Certified Public Accountants
A certified public accountant (CPA) can often provide more than just tax preparation. A CPA can also offer broad tax advice and other financial planning services. And a CPA can represent you during audits or appeals involving the IRS. CPAs may be right for you if you’re looking for a broad suite of tax and financial management services.
CPAs undergo some of the most rigorous training and ongoing education processes to maintain their status. They are licensed by state boards of accountancy. You can check your State Board of Accountancy’s website to verify a CPA’s credentials.
How Much Should You Pay a Tax Preparer?
Fees should always be put under a microscope when you’re deciding which tax professional to work with.Most tax preparers either charge a flat fee per return or by the hour. Overall, the more complex your tax situation is and the more paperwork going into play, the more you can expect to pay.
The average flat fee for a 1040, with itemized deductions and a state return, is about $409,
according to data gathered from the National Society of Accountants. The average flat fee for the more complex 1120 (C Corporation) was $913. And the fee for a 1041 (Estate/Trust) stood at $1,289.
But there are free services that millions of Americans can take advantage of. If your adjusted gross income (AGI) was $84,000 or less, you may be able to file your federal taxes for free through
Free File.
The Bottom Line
You may feel you need help from a professional this tax season. But remember that not all are created equal. And the worst-case scenario, you may find a fraudulent tax preparer out to steal your money. This is why it’s important to carefully evaluate tax pros. Look at their credentials, records, reviews and status with organizations like the BBB before you sign off on anything.
The Epoch Times copyright © 2025. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
