This time of year, folks might be looking for a professional to help them with their tax returns. Here again are some reminders about things to consider when hiring someone to prepare your taxes.
- Investigate. Go to irs.gov and check to see if the preparer is listed. Ask your friends and neighbors if they know anything about the preparer. Check them out with the Better Business Bureau.
- Give your records and receipts to the preparer. A professional will ask to see your receipts, records and other documents, and might ask questions so your total income, deductions, and credits can be calculated correctly. If they ask only for your last pay stub, find another preparer.
- Explain any changes that came up during the year. Changes such as a significant increase or decrease in income, marriage or divorce, a birth, a death, a job change, a move, buying or sell a home or real estate, buying or selling stock, or investing in a retirement plan can significantly affect your return.
- Do not sign a blank tax return. If this is suggested, leave with your documents.
- Before you sign, review your return. You are legally responsible for your tax return. Go through the return with the preparer, and ask questions if you don’t understand something.
- Report an abusive preparer to the IRS. Like any industry, there are a few tax preparers that do not adhere to high standards. Report them to the BBB as well.
Here are some specific questions to ask the preparer:
- What do you charge for preparing returns? Make sure your refund is sent directly to you and not to your preparer. Stay away from preparers who promote their ability to get you a large refund, or whose fee is a percentage of your refund.
- Do you have a Preparer Tax Identification Number (PTIN) issued by the IRS? All paid tax preparers are required to have an IRS PTIN. The preparer must also sign your return and include their PTIN. If a preparer claims they don’t need a PTIN, find another one.
- What continuing education classes have you taken? Tax laws change from year to year, and are very complex. Your tax preparer should be taking continuing education classes to stay abreast of these changes.
- What professional organizations do you participate in? What are your other professional credentials? Tax preparers are not required to belong to professional organizations or have special credentials. However, having the credentials and belonging to the organizations shows the preparer is committed to providing a good service to his/her tax clients.
- Will you answer my questions after tax season is over? Committed tax preparers ask their clients keep them informed of any correspondence they receive from the IRS or their state tax department. They’re also available to answer questions if needed.
- Can you E-file my return? Paid tax preparers who file more than 10 returns for clients are required to send them electronically to the IRS and the state tax authorities.
For more information, email me at [email protected].
Judith Ackland has more than 26 years of experience in accountancy and financial planning, including seventeen years as a CFO of a diverse business. She started Crystal Financial in 2010 to help a wide array of individuals, families, and business owners better understand their finances and how good financial management could help them achieve their goals. Judith has an MA in Professional Accountancy from the University of Nebraska at Lincoln as well as a Certified Public Accountant Certificate and a Certified Financial Planner designation.
