Finding a tax preparer in the US is not at all a cake walk. And the truth is about one-third population of the US hire a tax professional to file their taxes during the season. But do you know that there are 75,000 tax preparers available in the United States that help you in tax preparation, but don’t have any certification?
Crazy, isn’t it? And you all share your personal information with the tax preparer including your income, marriage, kids and even your social security number.Are you feeling anxious now? Stay calm! I’ve got you covered!
In this article, I’ll be sharing 7 effective tips that will help you find the right tax preparer for your business and personal purpose as well:
1. Take into account the qualification of the tax preparer
For every tax preparer, obtaining PTIN (Professional Tax Index Number) is easy, and you’ll find many non-CPAs holding PTIN as they have the right to represent you in IRS matters technically.
However, it is essential that you take a smart step and ask for credentialed prepares that involves CPAs, enrolled agents, licensed attorney or a person who has complete IRS Filing Season Program.
These tax preparers are quite expensive as compared to PTIN holders, but you should always prefer a person who can offer value for your money, especially in case of tax return preparation.
2. Ask your tax preparer about data security
During tax season, hackers across the nations get active as they know people will share their financial and personal information with tax preparation service providers or CPAs. More so, professionals will also utilize tax preparation software. So it’s high time for hackers!
That’s the reason; you should always ask your tax preparer about security measures. What security policies CPAs have incorporated into their organization? What steps are taken into consideration to safeguard your private data from such breaches? Have they installed security software?
3. Evaluate the fees with other providers as well
Honestly, this is the biggest drawback of hiring a tax preparer as the charges are high. However, if you do your homework well before tax season arrives, you can manage that cost easily.
Typically, the amount charged by the tax preparer wholly relies on how much complicated your tax situation is and how many unique taxes forms the CPA will hire to file your taxes. To simply put across, below-mentioned fees proposals are a common one:
Flat fee– In this structure, the tax preparer will give you a quick consultation and an estimate of the charges. You’ll also find hourly-based tax preparers, which will cost you extremely less.
Percentage-based fee– This proposal is the most dangerous fee structure of all. In percentage-based fee structure, you’ll be charged on the amount of refund you’ll receive after filing your taxes. Professionals try their level best to give you the maximum returns, but it increases the chances of IRS audits.
According to the National Society of Accountants 2017report, the average fee for preparing tax returns entailing an itemized Form 1040 with Schedule A and a state tax return is $273. You can check your estimated tax preparation fee in this calendar for 2019.
4. Always ask for e-file
The IRS guidelines state that any paid tax preparer who successfully does that tax file for more than 10 clients is subject to file electronically through the IRS e-file system and use direct deposit methods. If you find that your tax preparer doesn’t e-file, then it’s time to reconsider the professional because they are incompetent in their work.
5. Check the availability of the tax preparer-
Even though April 15th is the last date for filing taxes, many taxpayers cross the deadline and file for the extension. But it is recommendable that you hire a tax preparer before this date to stay stress-free. If you are trying to connect with a fly-by-night tax preparer, then you’re putting yourself in great trouble.
6. Make sure whether you’re tax preparer will give audit support or not-
We all the time recommend that one should be honest with IRS with regards to every document submitted to them and you’ve hire meticulous tax prepare as well, but sometimes your returns can be flagged for an audit unnecessarily.
As you know this possibility exists, you should always ask your tax preparer whether they offer support during such situations or not, as I’ve mentioned before that not all the tax preparers are allowed to enter in IRS matters, so find someone who can.
7. Cross-verify the history of the preparer-
Before hiring any tax preparer for your tax filing, always check the preparer’s history. Did the CPA ever go through any data breach or fraud? How the CPA handled that situation? Is a CPA has a bad reputation in the market? Get the answer to all these questions.
You can check online review or ask the CPA firm to share the previous client’s history to verify their reliability.
Additional advice if you hired any:
1. Avoid signing blank tax forms
Signing any blank paper can put you at stake. Be it a blank check, contract, simple paper, or even a tax form. There are innumerable disadvantages, if you sign a black check the other party can withdraw all the money, if you sign a contract the party can file a lawsuit against you to grab your property or business.
Same is the case with blank tax form as the tax preparer can fill anything in it, for example, they can add their own bank account number to get the refund and the IRS will catch hold you.
2.Double check all the documents before signing the tax return forms
Being a responsible citizen of the nation, review every tax form and document. If you’ve any questions or need some clarification, ask it. Every tax payer should feel comfortable with the accuracy of documents before signing it.
You should also make sure that your refund should be transferred directly into your account not in the account of your CPA. Therefore, review the routing process of the payments and then sign the documents. And do not forget to get a copy of your completed tax return.
3.Ensure that the preparer sign all the dotted lines and includes PTIN
According to IRS, every paid preparer have to sign all the documents of tax returns and mention their PTINs as well.
4. Directly report to IRS about abusive preparers
Most of the time tax preparers are honest and offer excellent services to their clients as they have to build their reputation in the market. But many are dishonest!
Every individual in the US has the right to report to IRS about abusive, dishonest and fraud tax preparers. You can use the form 14157 Complaint: Tax Return Preparer.
The tips mentioned above can greatly help you to pick the right tax preparer, alerting you about common frauds.