Choosing a Tax Preparer - 5 Key Questions to Ask

Don't like doing your own taxes? Join the club! Few things in life are as complex as the IRS tax code and each year it gets more complex. That's why millions of taxpayers pay someone else to prepare their returns. Since the IRS does not certify tax preparers (they do certify enrolled agents), it's important to do some due diligence. Remember, even though someone else may prepare them, you are still legally responsible for the accuracy of your return, so choose carefully. Whether for your business or personal taxes, here are five key questions to ask when seeking a qualified tax preparer.

What is your experience and training?
You'll learn a lot from their website or by Googling them, but it's a good idea to give them a call too. Find out how long they've been preparing taxes and what services they provide. Make sure they have a Preparer Tax Identification Number (PTIN), a new IRS regulation required for all paid tax return preparers. Ask if they're members of any trade associations, take continuing education classes, and stay up to date with the latest regulations. Keep in mind some states, like Oregon and California, require special licenses so make sure they're compliant with your state. Finally, if they pass muster, check with the Better Business Bureau and other professional organizations to determine if complaints have been lodged against them.

How much do you charge?
Rates for a basic federal tax return vary by geography and complexity of the return, so find out up front how they bill. Do they charge by the form? By the hour? For each follow up meeting or phone call? Is there an extra charge if your paperwork needs to be organized? Keep in mind you're not necessarily looking for the cheapest, you're looking for the best fit for your needs. If someone is significantly higher or lower, find out why. Steer clear of preparers who base their fee on your refund or promise a larger refund than someone else. Never allow your preparer to have your refund directly deposited into their account. It should only go to you.

Can I get some references? 
Obtain references for individuals whose tax situation may be similar to yours. When you contact the references, inquire about the preparer's strengths and weaknesses, accuracy, timeliness, and responsiveness to emails and phone calls.

Are you accessible after filing season?
Since tax issues can arise any time of year, preparers who disappear April 16 are probably not a good choice. If there's a question about your return, you'll want to be able to reach your preparer. Look for one with an established business who will be available to you throughout the year.

What documents do you need?
Save time and money by organizing your files and receipts ahead of time. While a reputable preparer will tell you the exact financial and tax documents you need, in general that typically means identification, income documents (W-2 and 1099 forms), expense documents. A good preparer will also ask you multiple questions to determine your income, deductions and other qualifications to ensure your return is accurate and thorough.

When you receive the return, review it to make sure you're comfortable with everything in it and that you have a copy for your files. Check for your preparer's signature and PTIN as required. Although paying taxes is unavoidable, you can avoid the stress that accompanies it. Maintaining clean, organized records and choosing the right preparer can make all the difference from a taxing tax season and a relaxing tax season.



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