Tax season is one of the busiest and sometimes, the most stressful, season in the U.S. During this time, commercials related to tax preparation starts to come out in the television and is played over and over again. These commercials vary from reminding taxpayers to file before the deadline and tax preparer agencies promoting their services. Since we all want to live in peace and comfort we usually resort to hiring a tax preparer to deal with confusing tax laws and identifying beneficial deductions. This demand has caused billions of dollars earned by tax preparation industry almost every year. If you’re one of those who are thinking about hiring an agency to handle tax matters for you, here are some helpful advice we want to share.
1. Each Tax Preparer Handles Tax Preparation Differently
Make sure you’re hiring a competent tax preparer because there are tons of them out there who don’t have complete experience and education to qualify. The tax preparation business is not strictly regulated because anyone can easily get the only requirement needed to prepare someone else's income tax return. That legal requirement is called PTIN number. This number is obtained from the IRS within a matter of 15 minutes as stated by IRS’s website. Information such as proof of experience, level of knowledge, or any competency test is not needed when getting the PTIN. It, therefore, doesn’t ensure one’s competence when it comes to tax preparation. It is best to hire attorneys or CPA’s who studied the general scope of tax and related subjects for many years. CPA’s proven to have passed difficult exams and attorneys with many years of experience are best suited in preparing your federal income tax return for you. The most important step in choosing the right tax preparer is researching about his or her experience, legitimacy, and educational attainment.
2. Look For Tax Preparer With Excellent Customer Reviews
When choosing the right tax preparer, taking a look at their customer reviews is a must. The reviews will tell you whether your tax preparer screwed a client in the past or if it doesn’t happen all the time. Although mistakes do honestly happen, hiring a tax preparer with lesser mistakes and higher excellent feedback from clients is the best way to go. It’s a big deal when a tax preparer butchers up your tax return such as making up nonexistent deductions or forgetting to claim dependents because accrued penalties and interest are charges to you which are non-negotiable. You might end up spending more than what you’re supposed to just because you didn’t do a thorough check on their previous working experience and feedback.
3. Use Your Money Wisely
While it may be true that you are able to save money by hiring the cheapest tax preparer there is in town, it just doesn’t happen all the time. It’s very rare to find a cheap Accountant who can provide outstanding service to taxpayers these days. So if you do find a cheap one and they messed up on your tax return, paying the accrued penalties and interest definitely meant you didn’t save money at all. Use your money wisely by taking the time to research about the agency. It will surely make your every penny worth it.
4. Don’t Fall Easily Into Feel Good Promises
Fraud Tax Preparers are also those who make big and false promises to taxpayers in order to lure you into paying them for their low-quality service. They will make you feel like hiring them will be a great choice by guaranteeing you with refunds without even check your tax information first. Walk away from people like them because they will normally engage in illegal practices such as messing with the numbers to get a higher refund which is unethical and illegal.
5. Ask How Their Preparer Fee Works
Asking about the preparer’s fee upfront will prevent you from dealing with preparers that are only there to make money out of a taxpayer's refund. The usual victims of this scam are low-income taxpayers. They are charged with unbelievable tax preparation fees which are about $500 just to simply file an income tax return. These preparers are also noncompliant with the EITC due diligence requirements and purposely miscalculates credit so they can get their hands on the taxpayer’s refund. As already mentioned above, once the IRS audits you and finds out about it, you will shoulder the penalties and interest, not the tax preparer. If you’re a low-income taxpayer, the IRS VITA program will help you out.
