How to Pick a Good Tax Adviser

All too often, people view tax time as just another ordeal they have to get through. But with a little advance planning, it's not so bad -- in fact, it can work to your advantage.

If all you're looking for is someone to prepare your return for you, then you have several options. Up for a challenge? If your tax picture is fairly straightforward, it's really not that hard to do it yourself -- especially given the wealth of information the Internal Revenue Service provides.

Also, tomes such as J.K. Lasser's Your Income Tax and the Ernst & Young Tax Guide are invaluable for their clear, concise explanations and illustrations of virtually any issue you might encounter. If nothing else, it might pay to do a quick back-of-the-envelope calculation using last year's forms, particularly if you've undergone a significant financial event such as buying or selling a home, large moves in your portfolio or starting a side business.

Alternatively, you can check out some of the very thorough tax software on the market, such as Intuit's TurboTax or H&R Block's Kiplinger TaxCut. Both use a question-and-answer process to enter your information on the tax forms, although you're also able to access the forms directly at any point.

The interview style helps users ascertain eligibility for deductions and credits, as well as explains some tax code arcana and checks for potential errors on the return. Both offer planning tips and general advice based on your personal data. We'll talk about the specifics of the top programs once the new versions are released in January.

When to Go With a Pro

Certainly, though, there are situations that should prompt you to consult a professional -- perhaps even before the tax year ends. If you've exercised incentive stock options, have actively traded stocks, or have a significant amount of unreimbursed employee expenses, for instance, a professional tax preparer can probably better assess the filing requirements and tax consequences of those issues. Also, if you became divorced or widowed or suffered some other catastrophic event (such as damage to your home caused by a natural disaster), you should also consider consulting a professional.