Judy, Boston, Nina, Rob, SteveF and all you other smart tax preparers?

Question

I've jumped ship away from engineering and am now doing taxes full time. I'd like to know what you suggest doing to prepare for the EA exam (classes? books?). What tax software do you use? How do you know how much to charge? Do you offer electronic filing? Do you offer RALs and RACs? How do you protect yourself from lawsuits?

Any info at all will be much appreciated. You all deserve "best answer", so please do be offended if I give it to someone else.

(sorry, I forgot about Matthew)

Answer 1

What am I, Chopped Liver? (lol)

I am an EA, and Gleim is a pretty good value if you're OK with self-study. If you prefer classroom, many local chapters of Enrolled Agent groups have a prep class for the SEE (Special Enrollment Exam).

BTW, I salute you for your ambition, but you need to know that as an EA you are held to a higher standard by IRS than if you are an unenrolled preparer. Given that Congress has "upped the ante" by changing the due diligence standrds and penalties for preparers you will want to follow this discussion while testing and make your decision to apply for enrollment after some of the fallout has emerged. I am of the opinion that EAs who do basic to intermediately complicated returns and stay on the "cut and dried" areas will have no problem. Rookies and non-pros, as well as aggressive preparers may find themselves having problems. I say this not at all to talk you out of it ( I STRONGLY encourage you) but to make you aware of a "hot topic" right now.

Below is a link to a Yahoo group of tax preparers that have already had dialogs on most of your questions. It is a moderated group, so you'll need to tell a little about yourself and play by the rules. Once a member you can search by keyword to find threads of discussion on all your questions. There you'll get my experience/opinions as well as several others on these and many other issues.

I will speak directly to one issue you've raised because I don't recall it being discussed in thie group: protecting yourself from lawsuits. The short answer is "do good work, and if you make a mistake( You will!!), clean it up (ie make your client whole) immediately". I have never even had the threat of a lawsuit. Also, as you learn new things and want to stretch your abilities to expand your practice, find a mentor to help review the returns before delivery to client.

On the other hand, many prep'ers can't sleep at night without Errors & Omissions (E&O) Insurance. The one big benefit is that they will defend you if you are sued. The downside is the cost and the deductible. Only you can answer the question if it is cost -effective given the type of work you do & the likelihood of making a mistake that could cost big bucks.

Answer 2

Being an EA is optional. I am not an enrolled agent. I have been using Intuit ProSeries tax software. It really is user friendly, they offer on line classes as well as tutorial options and tax law references with the software. As far a charging, I always charge less than H & R block. Their fees are outrageous and many of their staff have little or no experience. I do not offer electronic filing-just did not get into that segment of tax preparation. RAL takes a big chunk out of the taxpayer's money. I'd rather see them wait a few weeks than get hit with an APR that could be upwards to 800%. Have no reason to get involved with RAC. As far as potential lawsuits? People have a tendency of suing for anything. Unless you are so totally negligent in preparing their return, you really have nothing to worry about. I have guanantee that if I make an error, I will pay any penalty or interest. Impress on every client that if they get a love letter from the IRS to contact you immediately. If the client made a mistake, ie, didn't give you all their income items, they pay the P & I and a charge them a nominal fee. If I made the error, again I pay the P & I and give them a refund of their fee. Stand behind your work!!! Also, you can also invest in liability insurance. Good luck!!!

Answer 3

Hi Taxman

I'm not an EA so don't know about that test, so sorry, but I can't help there. I take a test every year to get certified to do taxes for the year, but it's nothing like the level that I assume the EA test is.

I do taxes thru Tax-Aide as a volunteer, and have for a number of years. It's almost all personal taxes, although I do a couple of very small, pretty simple sole proprietorship businesses. We use TaxWise software. I like it, seems to do the job well as long as you know what to enter and where, which any capable tax preparer would. And it does have a pretty smooth e-file capability - well, mostly smooth, they got a little messed up for awhile this year mid-season, and people had trouble signing on, then they lost one batch of my filings - they were very cooperative when I called them since I didn't get acks on them, and I retransmitted and all was well.

I'd think it would be pretty tough to be a successful tax preparer and not have e-file capability - people pretty much expect it these days, and rightfully so. Not necessarily so with RALs - those might be more expected by the people who go to H&R Block, anyway. Since with e-file they can have their return in a little over a week if the timing is right, less than 2 weeks at worst, it isn't necessarily a big deal. I'd guess that setting up RALs could be a real pain. Sounds like HSBC has pretty much a lock on the RAL/RAC market if you want to go that way.

As a private preparer you'd probably want to have liability insurance. Your question sounded like you were planning to work for yourself, not for a larger accounting group.

As to what to charge, you've got me there since mine is all volunteer - and the ones I do outside the program are for people I know well and I don't charge them. I'm retired from a paying job, so have that luxury. I'd figure a little more than H&R Block for personal returns, and probably by the hour for business.

Good luck, and don't worry about the "best answer" - this isn't a contest, we're just trying to get information out.

Judy

Answer 4

If you like studying tax matters, you will enjoy studying for the EA exam. I used the Gleim series (I am not affiliated with that program). There are other fine products to purchase. I studied for 4-5 months almost daily (I knew very little about taxes when I started) before taking (and passing) the exam.

You can now take the exam in stages, so your study process may be different. You can read up on the EA exam at irs.gov, and also check out the vendors.

As far as doing tax preparation for pay, you will get a lot of good guidance from the National Association of Tax Practitioners and the National Association of Enrolled Agents.

Check out their websites:

http://www.natptax.com/
http://www.naea.org

Answer 5

I even have not gained my refund yet. in spite of the undeniable fact that, I did document and replaced into extensive-unfold Jan. seventeenth. It wasn't untill Jan. nineteenth 'Wheres my refund' as much as date and reported I would desire to assume it via Jan 31 if there replaced into no delays. It wasn't till the day ahead of this (Jan 22) it as much as date with the aid of IRS computerized telephone reaction that my money would be deposited JAn twenty 5th. the web website did no longer replace till right this moment. Your ultimate wager is to call the IRS. Their computerized telephone gadget is extra as much as this factor on your refund. And the internet website is constantly changing my status, the different day it reported it hadnt gained my return yet, sounds extra like a working laptop or computing device glitch. There are people who're receiving deposits right this moment and the next day. It relies upon on how many are till now us to get the depositing technique performed. do no longer overlook to call your economic corporation additionally basically in case you do no longer see it via wed. some banks carry the money.

Answer 6

Review the IRS website on what the requirements are to become an Enrolled Agent
http://www.irs.gov/taxpros/agents/article/0,,id=100710,00.html

http://www.irs.gov/taxpros/agents/index.html