Prepare for Taxing Decision

So How Do You Pick a Pro?

There are plenty of people out there vying for your business, so make sure you do your due diligence.

First, understand the acronyms.

An enrolled agent, or EA, is a tax professional licensed by the IRS. Uncle Sam does background checks on all EAs once they pass this big IRS tax test. If you just want your taxes prepared, these folks will get the job done.

A certified public accountant, or CPA, has an accounting degree, passed a rigorous exam and worked under another CPA for a few years before becoming licensed. If you have a complicated situation or are looking for a long-term tax plan, you probably should consider a CPA.

Now, where do you find these people?

If you pop into any H&R Block(HRB Quote) or Jackson Hewitt, you'll find loads of tax preparers who are trained in-house, but don't have to be either EAs or CPAs.

These places are the fast-food restaurants of the tax world. Show up with your stuff and they'll turn around a tax return for you. So if your return is straightforward and you have no interest in trying to tackle it yourself, these places are perfect for you. Expect to pay anywhere from $150 to $450 per return.

If your situation warrants a CPA, then get some referrals. "Word of mouth is always your best bet," says Fooden. Ask your friends and colleagues if they like their tax accountants. How long have they been with them? And how quickly do they return phone calls?

Or search the Web for your state's society of CPAs or EAs. The sites should offer a search function to help you locate a CPA or EA in your area.