State and federal tax laws can seem intimidating to individuals who have little or no professional tax experience, which explains the reason many Santa Cruz County residents turn to tax preparation experts for assistance in preparing their tax reports.
When hiring a local tax preparer, you’re smart to concentrate your efforts to locate a tax preparation service on IRS enrolled agents and California Agents who are registered with the tax board.
Tax Preparers in Santa Cruz County Also Must Register with California Tax Authorities
California has been regulating professional tax preparers for years. California state regulations help to eliminate some of the concerns that may arise when residents select tax experts.
In 2011, the Internal Revenue Service implemented a system to track and test tax preparers who charge a fee for their services. These preparers must register with the IRS, and in turn, they receive a tax preparer tax identification number (PTIN). To receive a PTIN and the Registered IRS Tax Preparer designation, tax preparers must pass an exam proving their tax competence.
Santa Cruz County Tax Preparers Must Register with IRS
Federal tax return preparers must have a PTIN or the IRS may reject the returns that they prepare. It may be a red flag if your tax preparer will not sign your return. This may indicate that the preparer is not certified or qualified to prepare your tax forms.
In most states, anyone can complete a tax form and charge a fee for doing so. This means that the individual receiving tax preparation services may be subjected to inexperienced tax preparers.
No Registration Required for San Francisco Bay Area Non-Exempt Tax Preparers
Non-Exempt tax preparers in Santa Cruz County must register with the Franchise Tax Board. Tax preparers must also receive 60 hours of training in a California Tax Education Council (CTEC) approved education course to register.
They also must obtain a tax preparer bond from an insurance or surety agent.
Preparers such as those with current CPA certifications and tax attorneys are exempt from this requirement because they are regulated through other state boards.
Each year, non-exempt tax preparers must renew their registration with the board, and to renew they must receive an additional 20 hours training in a CTEC approved course.
Types of Tax Preparation Companies in Santa Cruz County
Tax preparers in Santa Cruz County may be certified public accountants, lawyers, bank and trust officials and enrolled agents. Each tax preparer has a certain level of expertise, and due diligence is essential to ensure that you select an Santa Cruz County tax preparer who is knowledgeable enough to handle your tax situation.
If your tax scenario includes complicated financial transactions, a CPA who specializes in such situations may be your best bet. Likewise, if you are in the midst of a divorce and you have extremely valuable assets, a certified tax attorney may be able to guide you. Some enrolled agents specialize in certain areas, and you should, therefore, select a tax preparation firm that is knowledgeable about your specific case.
Professional Accounting or Bar Association Does Not Guarantee Tax Experience
The CPA designation does not automatically translate to tax expert. Membership with the California Bar Association also does not guarantee that an attorney possesses the experience required to handle complex tax issues. CPAs may be able to help you manage your finances and thus may help in creating an overall tax plan.
Make sure that the CPA you select has experience in filing Santa Cruz, Watsonville, Scotts Valley, Berkley or any other city taxes in California. A bonus of hiring a CPA tax preparation firm is that they can represent you if the IRS chooses to audit your return. Tax attorneys also can represent you in court and with the IRS when legal issues arise. Make sure that your counsel has tax filing experience if you need tax preparation services.
Bear in mind that legal representation and tax preparation do not amount to the same thing.
Tax Experience Counts in Santa Cruz County
Always keep the tax preparers experience and expertise level in mind. An employee working for a registered agency may not be as experience or have the same level of expertise as the owner of that firm.
The person who signs your form as the preparer is ultimately responsible for the presentation of your information; therefore, you should have access to this person if you have questions.
Also, be on the lookout for illegal tax preparers. There are thousands of tax preparers in Santa Cruz County who are not registered, and they may not have the necessary education or insurance bond requirements.
These illegal tax preparers may not be qualified to address your tax situation and may make costly mistakes on your tax forms.
National Tax Preparation Chains Depend on Software Prompts
Preparers at national franchises use tax software that prompts for certain information. These options are ideal if your tax situation is simple and you require a quick refund turn-around.
However, if the tax preparer you’re considering has no tax knowledge beyond the software prompts, and your tax and financial situation is complicated, you may want to consider spending your money on a professional tax preparation service in Santa Cruz County. Get a firm that can advise you on your current situation as well as prepare you for future events and tax savings.
Avoid Tax Preparation Companies that Guarantee Upfront Refunds
Be wary of firms that promise you upfront refunds and those that charge you according to the amount of your anticipated refund. Your goal is to find tax preparation firms that will help create the best presentation for your tax situation.
Aggressively seeking out deductions is advantageous, but you should avoid anyone who suggests underhanded or deviant ways to obtain a bigger refund. You want a tax preparation company that will find legal ways to reduce your tax liabilities.
Furthermore, you want a firm that will stand behind their work and will represent you with the IRS or tax courts if the need arises. This also means that you should seek out firms that will be around when the height of the tax season is over. If the tax preparation service you’re considering disappears from localities in Santa Cruz, Freemont, Scotts Valley or your neighborhood after April 15th, you may want to consider a different firm.
What to Expect from Your Tax Preparer or CPA
When you consult with the tax preparation company in Santa Cruz County, the associate will ask you a series of detailed questions. These questions are meant to give the associate your background so that you can present your tax case in the best light.
You will need to provide the tax preparation company with proof of all information that you present, including W-2 and 1099 forms. If you paid tuition, bring proof of these payments, and if you had out of pocket medical expenses, bring those, as well.
In fact, you should provide the associate with copies of all major payments, social security numbers for all dependents and proof of changes, such adoptions and births, in your family. The associate will discuss your current tax scenario and will point out deductions and credits that will help reduce your tax liability.
Also, expect the associate to help you develop strategies that you can implement to reduce your tax burden for future years. If the associate determines that you missed some deductions from previous years, she may help you determine the best way to recoup those credits. One strategy may be to file amended tax returns.
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