At this point you should have received your W2, 1099 and any other applicable tax documents. With all of these in hand, you are ready to complete your taxes. If you know how to prepare your own taxes then you’re ahead of the game. But if you happen to be like the 80% of Americans who use either a paid tax preparer or purchase tax software to submit their taxes, you prefer someone else to crunch the numbers for you and there’s nothing wrong with that.
But if you are someone who prefers to have a live human helping you with your taxes, you need to be sure that choose wisely. Here are 5 tips to help you pick a trustworthy tax preparer:
#1 Require Expertise. First and foremost, your tax return needs to be accurate. If not, it can land you in big trouble with the IRS – that’s why so many people choose to hand off the task to someone else. You don’t have to be a CPA to know your way around a personal tax return, but you do need expertise. You should think of expertise as the combination of experience and knowledge. Both are necessary in a competent tax preparer. Find out how long the preparer has been doing taxes and what education or certifications they have.
#2 Look for Signs of Stability. A tax service that’s only open during tax season isn’t much help to you if you get an audit notice months later or a letter saying your tax return wasn’t properly prepared. Likewise, a stranger you find on Craigslist that prepares taxes in their kitchen may also not be the most stable choice. One of the hallmarks of tax fraudsters is their mobility – they don’t want to be around if you come back with a complaint – or worse, looking for your money if they’ve absconded with it. A permanent business is best – one that’s open year round offering accounting and tax services.
#3 Don’t Fall for Promises. Don’t ever be lured in by anyone promising a big refund. No one can know if you’re due a refund or how large without looking at your documents. But what they can do is promise you a big refund and fiddle your numbers to generate one because they either want a percentage of it or are planning on stealing your refund. The IRS often automatically sends out refunds and then later reviews the authenticity of the return. If your preparer cooked the books to get a refund, you’ll be the one who has to pay.
#4 Know Your Fee Upfront. Run screaming from any purported tax “expert” who wants to charge you a percentage of your refund to prepare your taxes. This is a sure sign of bad things that can land you in hot water later. This type of fee is against the law because it incents the preparer to maximize your refund at all costs. A flat fee is fair and doesn’t give anyone an incentive to cheat. Different tax preparers will charge different fees – some charge by the hour and some by the type of return with additional charges for each schedule they must prepare for you.
#5 References and Review. Check references for your preparer – ask them for the names of past customers and contact them to confirm they did a good job for them. You should also confirm they have a TPIN and that it matches their name. If they’re not registered in the IRS system, don’t use them. You should always review your forms, once completed, and verify basic information such as that your top line income matches your W2s. Never sign a blank return and before you sign, make sure your tax preparer has signed and provided their TPIN number.
Selecting a tax preparer is important with more tax fraud running rampant than ever before. If you select a good one, you will pay the minimum legal taxes and/or get the maximum legal refund. But if you make a bad choice, your refund may be bungled, you may be overcharged or your refund may be stolen from you. What’s worse is a bad choice may land you in hot water with the IRS and no one wants that!
For more information on how Beaton Accounting can assist you with ALL of your tax preparation needs, please contact a tax professional at Beaton Accounting for a FREE consultation at: 631-921-6894.
Have a question or certain topic you’d like to see addressed in our next blog post? Just leave a comment, or e-mail us at info@beatonaccounting.com.