Although Punxsutawney Phil declared a delay for spring this year, there’s one date he can’t put off: April 15.  The dreaded income tax deadline.  It’s  March, and the countdown has begun.

According to the IRS, about 60% of taxpayers hire a tax professional to prepare and file their tax returns, even in the wake of software solutions and free online tools. But how do you decide which type of tax professional is right for you? What’s the difference between using an Enrolled Agent, a CPA (Certified Public Accountant) or a tax preparer? Let’s take a look.

Enrolled agent. Enrolled agents are licensed to practice by the federal government (“enrolled”) and authorized to appear on behalf of the taxpayer (“agent”) before the IRS. Enrolled agents advise, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any other entities with tax-reporting requirements. Enrolled agents earn their license by passing a comprehensive tax code examination, or by having worked at the IRS for at least five years in a position that regularly interprets and applies the tax code and its regulations.  Additionally, to maintain their status, Enrolled Agents are required to complete 72 hours of continuing education, reported every three years.  Prior to being licensed, Enrolled Agents must also go through a rigorous background check by the IRS.

CPA. Enrolled agents are licensed by the federal government and specialize in taxation. CPAs are licensed by state boards of accountancy and may or may not specialize in taxation. CPAs have completed a course of study in accounting at a college or university and have passed the Uniform CPA Examination. They must also have met the experience and good character requirements set by their state board of accountancy, and must comply with ethical standards and continuing education requirements to maintain their active CPA license. Like Enrolled Agents, CPAs have unlimited representation rights, which means they may represent their clients on any matters including audits, payment/collection issues, and appeals.

Tax Preparer. Unlike Enrolled Agents and CPAs, uncredentialed tax preparers have only limited representation rights for their clients.  The IRS has a new, voluntary program –the Annual Filing Season Program – designed to recognize the efforts of tax preparers who strive to achieve a higher level of professionalism. Participants who complete 18 hours of continuing education, including a 6-hour federal tax law refresher course with test, receive an Annual Filing Season Record of Completion from the IRS and are included in a public database of return preparers.  Effective January 1, 2016, tax preparers who have not completed the Annual Filing Season Program will have no representation rights.

Your decision as to which professional to use will be based on your particular situation. Whomever you choose, though, be sure to keep these things in mind.

1. Check their qualifications. All paid tax return preparers must have a Preparer Tax Identification Number (PTIN).
2. Check for disciplinary actions and license status via the Better Business Bureau, state board of accountancy or IRS Office of Professional Responsibility (Enrolled Agents).
3. Review the entire return before signing it. Be sure you understand everything. Ask questions if you don’t.
4. Be sure that the person you hire to prepare your return signs the tax form and includes their PTIN. This is required by law.
5. Remember that you are legally responsible for what’s on your return even it if is prepared by someone else.

Keep your eye on this blog.  In a few weeks I’ll be posting my interview with a CPA who has some very helpful tax tips for seniors!