It’s tax time. A majority of taxpayers hire someone to help them prepare their returns. Here are ten tips for choosing a tax preparer.
Is My Tax Preparer Responsible for Mistakes?
You are still legally responsible for everything your tax return contains. This is true even if someone else prepares your return. Needless to say, you should choose your preparer wisely.
Check the Preparer’s Qualifications
You should always check a preparer’s qualifications before hiring him or her. The IRS has an online tool to help you.
This tool is a searchable and sortable listing of tax preparers. You can find the ones based on your needs for skills, education and expertise. All preparers in the directory currently hold professional credentials recognized by the IRS or hold an Annual Filing Season Program Record of Completion.
Check the Preparer’s History
If the preparer is not a CPA, enrolled agent, or attorney, lean on the Better Business Bureau for information about them. For CPAs, check with the State Board of Accountancy.
Ask about Service Fees
Avoid preparers who base fees on a percentage of the refund or who boast bigger refunds than their competition. Such an arrangement encourages tax fraud-and you’ll be liable along with your preparer. When asking about a preparer’s services and fees, don’t give them tax documents, Social Security numbers or other information.
Ask to E-File
Make sure the preparer will file your return electronically. This is the quickest way to get your refund.
Provide Records and Receipts
After you hire them, good preparers will ask to see your records and receipts. They’ll ask questions to figure things like the total income, tax deductions and credits.
Never Sign a Blank Return
Don’t ever hire a tax preparer who asks you to sign a blank tax form. This invites all sorts of fraud.
Review Return Before Signing
Review your return before signing it. Make sure you understand everything in it. Ask questions if something is not clear. Remember, you’re responsible for everything in your tax return. The preparer should give you a copy of the completed tax return.
Your Refund Should Go to You
Make sure that your refund goes directly to you, not to your preparer’s bank account. Review the routing and bank account number on the completed return.
Ensure the Preparer Signs and Includes Their PTIN
All paid tax preparers must have a Preparer Tax Identification Number issued by the IRS. By law, paid preparers must sign returns and include their PTIN. Any preparer who doesn’t do this is illegitimate.
Report Abusive Tax Preparers to the IRS
Report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you think that a tax preparer filed or changed your return without your consent, you should file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit.
MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.