Local service guide
Tax preparation in Allentown, PA: Hiring Guide
Tax preparation for an Allentown small business should start with a written scope: ask who will handle your federal and Pennsylvania returns, local earned-income filing, city business privilege tax review and any bookkeeping cleanup. Choose a preparer with experience in your business activity, and ask about notice support before hiring. Paid federal preparers must have an IRS preparer tax identification number, or PTIN; CPAs, enrolled agents and attorneys have unlimited representation rights before the IRS. [4]
Choose a preparer for the work you need
Describe your business before asking for a quote. Tell the preparer whether you sell goods, provide services, receive rental income, employ staff or operate across municipal boundaries. Ask them to name the returns and bookkeeping tasks they propose to handle. Request examples of relevant work without asking them to disclose another client's information.
The IRS distinguishes return preparation from representation. Enrolled agents, CPAs and attorneys may represent clients in audits, payment and collection matters, and appeals. Annual Filing Season Program participants have limited representation rights. Preparers who hold only a PTIN and do not participate in that program have no representation authority for current returns. [4]
If you have a notice, send it before the consultation and ask whether the proposed professional can handle that issue. Confirm who will prepare the return, who will review it and who will speak with you after filing. Discuss how the firm protects uploaded records and how you will receive copies of completed work.
Separate city gross receipts from business profit
Allentown's business privilege tax uses gross business volume attributable to transactions within the city, subject to exclusions and deductions in the ordinance. The city sets rates of $1 per $1,000 for wholesale transactions, $1.50 for retail transactions and $3 for service and rental transactions. The transaction that produces the receipts determines the rate, rather than the vendor's principal business. [1]
For a business that sells products and provides services, ask the accountant to review how you classify each receipt category. Bring sales reports, invoices and records of refunds or credits. The ordinance requires taxpayers claiming exclusions and deductions to keep records that show those amounts separately. Request a written explanation of any allocation of receipts between city and outside-city activity. [1]
Berkheimer defines net profits as net income from operating a business or profession, with exclusions described in its guidance. Ask your accountant to determine which income belongs in your local net-profits calculation. Have the accountant review that calculation alongside the separate city gross-receipts calculation. Include both tasks in the engagement so you can review the figures and understand which records support each return. [3] [1]
Scope local filing for owners who move or commute
The Allentown School District tax page lists an earned-income tax rate of 1.975% for residents and 1.28% for nonresidents. Berkheimer says Pennsylvania employers with a physical location in the state must compare an employee's resident rate with the work location's nonresident rate and withhold at the higher rate. Give your preparer your home and work addresses before asking them to check withholding. [2] [3]
If you moved during the year, bring the addresses and dates for each residence. Berkheimer instructs part-year residents to file for the period they lived in its jurisdiction, prorate income, expenses and withholding, and complete the change-of-address section. Ask the preparer to include the relevant municipal returns in the quote. [3]
For work outside Pennsylvania, bring the other state's return and withholding records. Berkheimer requires supporting documentation for claimed credits and identifies restrictions on out-of-state credits. Have the preparer explain the credit calculation for your circumstances before treating the amount withheld as a local credit. [3]
Compare fees and agree on the handoff
Request a fee broken into return preparation, bookkeeping cleanup, ongoing accounting and notice support. Ask whether the quote includes owner and entity returns, Pennsylvania filings, local earned-income returns and the city business privilege review. Have each candidate quote the same list, then compare exclusions and the process for approving extra work.
Bring prior returns, tax notices, income documents, bank and card statements, payroll reports and a list of missing records. Ask the accountant to identify unresolved transactions before drafting returns. For ongoing bookkeeping, agree on who reconciles accounts, how you approve corrections and when you receive reports.
Set a document delivery date and a return review appointment. Request copies of filed returns, filing confirmations and payment instructions. Before signing, review business income, deductions, addresses and bank details with the preparer. Record who handles rejected filings or later correspondence and whether that work carries a separate fee.
Allentown business privilege tax per $1,000 of taxable receipts
Local details that affect your job
City business privilege filing needs its own scope
Allentown's ordinance sets April 15 as the annual business privilege return and payment deadline, measured by the preceding year's actual gross receipts except for seasonal, temporary or itinerant businesses. Ask your accountant to confirm the applicable filing instructions and include this city task in writing. If you close the business, the ordinance requires a return and payment within 30 days of ceasing business. [1]
Local withholding does not replace the annual return
Berkheimer says taxpayers with wages in an earned-income-tax jurisdiction must file an annual local return for the preceding year, generally by April 15, with a next-business-day rule when that date falls on a weekend. Even when an employer remits withholding to your resident jurisdiction, you must file. Ask whether the accountant's quoted service includes this return and any part-year residence allocation. [3]
Route school tax questions to the collector
The Allentown School District does not accept tax payments and directs real estate and per capita tax questions to Berkheimer. If a school tax balance or bill prompted your search for an accountant, first ask the collector for the balance or billing information. Then ask the accountant to review the records or advise on the issue you need resolved. [2]
Match the engagement to your situation
| Your situation | Ask for | Confirm before hiring |
|---|---|---|
| Owner with wage income | Owner return preparation and annual local earned-income filing | Local filing remains necessary even when an employer remits resident withholding. |
| Mixed product and service sales | Bookkeeping classification and city business privilege review | Allentown determines the rate by transaction type. |
| Move during the tax year | Part-year local returns and allocation review | Berkheimer requires residence-period allocation and address updates. |
| IRS audit or collection issue | A CPA, enrolled agent or attorney with relevant experience | These credentials carry unlimited IRS representation rights; agree on the issue and fee. |
| Unreconciled business accounts | A separate cleanup engagement before return preparation | Agree on missing records, correction approvals and deliverables. |
Your hiring checklist
- Describe your entity, business activities, locations and the tax years you need help with.
- Ask for the preparer's PTIN and confirm any claimed professional credential.
- List each federal, state, local and city task in the written engagement.
- Provide residence dates, work addresses and withholding records for the year.
- Separate product sales, service receipts and rental receipts for review.
- Request separate fees for cleanup, ongoing bookkeeping and notice support.
- Agree on document deadlines, return review and delivery of filing confirmations.
Frequently Asked Questions
Do I need a CPA to prepare my federal return?
The IRS permits a tax professional with an active PTIN to prepare federal returns for compensation. A CPA is one option. Enrolled agents and attorneys also have unlimited IRS representation rights. Ask about relevant training and experience, then choose the professional who can perform the work you need. [4]
Does payroll withholding cover my local filing?
Berkheimer says you must file an annual return with your resident taxing jurisdiction even when your employer remits the tax there. Ask your preparer to reconcile withholding and include the local return in the engagement. [3]
Does every rental property owe city business privilege tax?
Ask the accountant to review the property against the ordinance's exceptions. Allentown exempts rental received from a building of two units or fewer that was originally erected as a private dwelling and that the owner occupies as a residence during the tax year. Provide the property's history and occupancy details. [1]
How should I compare accounting quotes?
Give each candidate the same records summary and requested deliverables. Compare fees for preparation, cleanup, local filings and follow-up. Ask who approves extra charges and what happens if records arrive late or the preparer discovers another return to complete.
Sources and scope
This guide combines the sources below with practical planning guidance. Figures apply to the stated geography and period; request a written quote for your property.