- Days left

Seven Tips for Choosing a Tax Preparer

Seven tips for hiring the right tax professionalAs tax laws become increasingly complicated, more taxpayers rely on tax professionals and tax software to help prepare their returns. In her most recent report to Congress, the National Tax Advocate, Nina Olson, cited tax complexity as one of the most serious problems facing taxpayers, noting that about 60% of taxpayers pay someone to prepare their returns.

If you're one of the estimated 84 million taxpayers who will opt to use a paid tax preparer this tax season, you should choose carefully. You're legally responsible for what goes on your tax return, even if the return is prepared by someone else. You want to select someone who is knowledgeable, honest and professional. How do you find a preparer that measures up? Following are seven tips for choosing a tax preparer:Use the Web Wisely

Google the names of tax preparers in your area. But don't stop there. Click on the tax preparer's website and find out more about the tax preparer's qualifications. Don't be blinded by a fancy website -- you're looking for substance, not flash. Check to see whether the preparer has stayed up to date with the latest tax news; writing a tax blog or newsletter, being interviewed by the media for tax news stories and teaching or speaking engagements are good indications that the preparer is on top of the latest issues.

Do Some Due Diligence

It's exactly what it sounds like. Check with professional organizations and licensing agencies to determine whether any complaints have been lodged against the preparer. A complaint isn't necessarily indicative of any wrongdoing, but you should regard a preparer with a number of complaints with some measure of caution.

Make Sure the Preparer is Eligible to File Your Returns

New IRS regulations require all paid tax return preparers (that includes attorneys and CPAs) to have what's called a PTIN, or Preparer Tax Identification Number, in order to prepare federal income tax returns as of Jan. 1, 2011. Additionally, some states, like Oregon and California, require special licensing in order to prepare returns. Make sure your tax preparer is compliant with any state regulations. Don't be shy; ask up front.

Investigate Fees

A basic federal tax return can cost between $200 and $500 to prepare, but that amount can vary drastically depending on the complexity of your return as well as where you live (metropolitan areas tend to be more expensive, for example, due to increased overhead). Don't assume that cheaper is always best or that a more expensive preparer is necessarily better. If a preparer's fees are significantly different from others in the area, ask why. Additional services included (or excluded) may affect the pricing. Be wary of tax professionals who base pricing on any anticipated refund; the IRS has found that this kind of financial incentive can result in cutting corners or tax fraud.

Trust Your Intuition

A professional tax preparer will return your phone calls and answer your questions (though remember that most are very busy at tax time, so be patient). A responsible preparer will also advise you which tax and financial documents to bring to your appointment. Remember that you should feel comfortable asking questions, not intimidated. If you're not getting good service, don't stick around. And never sign a blank tax form -- a reputable preparer wouldn't ask you to sign your return before it's been completed.

Make Sure Your Tax Preparer Will Be Available

Tax preparers who hang out a sign in March and April and then disappear for the rest of the year tend not to be a good choice. If there's a problem with your return, you'll want to be able to reach your tax preparer to ask questions. Look for a preparer with an established business and not a "fly by night" service. Make sure you find out upfront when the preparer's office is open and how you can make contact with the preparer in the off-season.

Finally, Ask Around for Referrals

We rely on the advice of our friends and family for everything from buying a new car to finding a pediatrician. Why not do the same for your tax preparer? Ask around for a few names from folks you trust and follow up with questions about what the preparer does (and doesn't do) well. But as with anything else, do your homework (see numbers 1-6 above). Just like your friend's cute new haircut, what works for one person doesn't always work for another.

Increase your money and finance knowledge from home

Basics Of The Stock Market

Stock Market 101 - everything you need to know but were afraid to ask!

View Course »

What is Inflation?

Why do prices go up?

View Course »

TurboTax Articles

Are You Exempt From Health Care Coverage?

The Affordable Care Act, or Obamacare, is an individual mandate that requires all eligible Americans to have some form of basic health coverage by 2014. Those without insurance will receive a penalty when they file their tax returns ? that is, unless they have an exemption. TurboTax's Exemption Check can help you find out whether or not you qualify for an exemption.

Essential Tax Forms for the Affordable Care Act

The Affordable Care Act (ACA), also referred to as Obamacare, affects how millions of Americans will prepare their taxes in the new year. The law now includes penalties for all who haven?t obtained health insurance -- and those penalties are expected to be paid at tax time. The ACA also provides tax credits to help people pay for insurance, and you can claim those credits when you file your taxes. The Internal Revenue Service (IRS) has introduced a number of tax forms to accommodate the ACA.

Mortgage Refinance Tax Deductions

When refinancing a mortgage to get a lower interest rate or obtain more favorable loan terms, you're really just taking out a new loan and using the money to pay off your existing home loan. In general, the same tax deductions are available when you're refinancing a mortgage as when you're taking out a mortgage to buy a home.

How to Determine if You Have Minimum Essential Coverage (MEC)

The Affordable Care Act, also known as Obamacare, requires most Americans to have health insurance that meets a government standard known as "minimum essential coverage," or MEC. Whether your insurance qualifies as MEC depends not on the plan itself, but on how you obtained your coverage.

Rental Property Deductions You Can Take at Tax Time

Rental property often offers larger deductions and tax benefits than most investments. Many of these are overlooked by landlords at tax time. This can make a difference in making a profit or losing money on your real estate venture. If you own a rental property, the IRS allows you to deduct expenses you pay for the upkeep and maintenance of the property, conserving and managing the property, and other expenses deemed necessary and associated with property rental.

Add a Comment

*0 / 3000 Character Maximum