- 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.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

TurboTax Articles

Do The Math: Understanding Your Tax Refund

For most people, tax is collected by an employer at a rate that estimates your tax for the year. Your actual earnings and the deductions that you?re allowed to claim might cause you to pay too much tax, which leads the Internal Revenue Service to issue you a refund. "The idea behind a tax refund is quite simple," says James Windsor, a certified public accountant from Ann Arbor, Michigan. "When you pay more tax than you owe, the Internal Revenue Service returns the overpayment as your refund."

5 Tax Tips for Single Moms

If you?re a single mom filing your taxes, make use of tax credits and deductions that can help reduce your taxable income and reduce the amount of tax you pay. A number of strategies, credits and deductions can be used to reduce taxable income, and in some cases, allow tax refunds even if you didn?t pay in any taxes. When you use TurboTax, we?ll ask simple questions and handle these calculations for you.

5 Tax Tips for Single Parents

Filing taxes as a single parent requires coordination between you and your ex-spouse or partner. Usually the custodial parent claims the child as a dependent, but there are exceptions. A single parent is allowed to claim applicable deductions and exemptions for each qualifying child. Even though you claim your child as a dependent, she may still have to file her own tax return if she has income, such as from an after-school job.

Affordable Care Act Decoded

The health care reform law known as the Affordable Care Act may directly affect your tax liability. Many taxpayers are familiar with the requirement that most Americans either carry health insurance or pay a tax penalty. But that's just one provision, and knowing what else is in the law can help you avoid surprises come tax time.

Add a Comment

*0 / 3000 Character Maximum