Tips for Choosing a Tax Preparer

Although Monroe County offers a variety of free, or low cost tax assistance programs, sometimes a paid preparer may be necessary. If you do not qualify for the free services offered in the community but are nervous about filing your taxes on your own, with software like Turbo Tax, ask yourself these three questions from MSN Money:

1. Are you prepared to give your taxes your time? The average tax payer spends between 22 and 32 hours filing their taxes return. Do you have that kind of time?

2. Are you prepared to give up the cash to pay a preparer? Average tax payers pay between $290 and $410 on preparers. However, money that you spend on a preparer this year may be tax deductable on your return next year.

3. Are you prepared to deal with the complexity of the federal code? 
The tax code is complicated. To avoid making errors, 90% of Americans pay preparers or use software to ease these complexities.

So, whether you don’t have the time, or your return is extremely complicated, hiring a tax preparer may be your best option. However, not all preparers are created equal. To protect you from preparer scams the IRS has provided a helpful list of tips for choosing a preparer:

  • Check Credentials

           –    The IRS now requires that all prepares have a Preparer Tax Identification Number (PTIN)
           –    Based on your needs choose between am enrolled tax agent, a lawyer, and a CPA (certified public accountant)

  • Check History

           –    For enrolled agents the Better Business Bureau’s website to check if the preparer has any questionable history
           –    For CPA’s, you can determine their licensure status and any disciplinary actions they may have through the state  boards of accountancy
           –    For lawyers, visit the state bar association to review their history.

  • Service Fees

           –    Avoid preparers that charge service fees as a percentage of your tax refund. These preparers may be inclined to claim false deductions to get you a larger refund, resulting in better pay for them.

  • Ask if They Use Electronic Filing

           –    E-filing has been around for 13 years and provides a safer and more secure way to file your taxes

  • Never Sign a Blank Form

           –    You never know what the preparer could write on that form, which you have now agreed to and authorized by signing.

  • Make Sure Your Preparer is Accessible

           –    You may have questions about your tax refunds after April 15th or about how certain purchases, like a home, affect your taxes throughout the year. You do not want a preparer that is finished after your taxes are filed. Make sure that your preparer will be there to help throughout the entire year.

Twitter/Facebook: Are you considering paying a tax preparer this year because you just don’t have the time to do them yourself or your returns are complicated. Check out the latest FSA blog post for advice on choosing a preparer!