How to choose a tax preparer?
Deciding to choose a tax preparer can be a tricky and important decision that you will make. Here are some of the general facts that you should know about tax preparers before you decide to choose one.
· A paid tax return preparer with primary responsibility for overall substantive accuracy of a return is required, by law, to sign the return and include a preparer tax identification number (PTIN) on the return.
· Although the tax return preparer signs the return, you are ultimately responsible for the accuracy of every item on your return.
· IRS does not certify tax preparers. (They do certify enrolled agents.) Anyone can do tax returns as far as the U.S. government is concerned, although some states such as California, New York etc. impose a licensing requirement.
· Shopping around for a tax preparer by asking them to prepare a tax return and then deciding to go to them, may not be a good idea. You need to ensure that your tax preparer is competent enough to prepare your tax return. Once you do that you would need to rely on their professional experience and expertise.
· Typically a tax preparer could be an enrolled agent, a public accountant, a certified public accountant or a lawyer.
So where should you look for a tax preparer? Your best bet is to ask your friends, family, co-workers. Friends in similar financial situations are the best source. These days you can also check the internet to find a tax preparer in your neighborhood. Read the reviews that others have written about the quality of the tax preparer’s service before your decide to engage their services.
The IRS has outlined some of the points that you might want to keep in mind before you decide to engage a tax preparer:
· Check the person's qualifications. New regulations require all paid tax return preparers to have a Preparer Tax Identification Number (PTIN). In addition to making sure they have a PTIN, ask if the preparer is affiliated with a professional organization and attends continuing education classes.
· Experience: Most preparers can do a simple 1040, but your family's trust could throw some preparers for a loop. Check out any special requirements in advance. While you're at it, make sure that the preparer's experience is current. The tax laws are changing all the time.
· Find out about their service fees. Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers. Also, always make sure any refund due is sent to you or deposited into an account in your name. Under no circumstances should all or part of your refund be directly deposited into a preparer’s bank account.
· Ask if they offer electronic filing. Any paid preparer who prepares and files more than 10 returns for clients must file the returns electronically, unless the client opts to file a paper return. More than 1 billion individual tax returns have been safely and securely processed since the debut of electronic filing in 1990. Make sure your preparer offers IRS e-file.
· Make sure the tax preparer is accessible. Make sure you will be able to contact the tax preparer after the return has been filed, even after the April due date, in case questions arise.
· Provide all records and receipts needed to prepare your return. Reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items. Do not use a preparer who is willing to electronically file your return before you receive your Form W-2 using your last pay stub. This is against IRS e-file rules.
· Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.
· Review the entire return before signing it. Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
Finally you should stay away from a tax preparer who possess any of the following traits:
· Guarantees you a refund upfront or charges a fee based on the size of your refund.
· Arranges to have your refund sent to an address that's not yours.
· Doesn't ask too many questions or doesn’t ask for supporting documents such as W-2 wage statements.
· Offers to create documents to support false or exaggerated deductions.
· Asks you to sign a blank form.
· Refuses to give you a photocopy of your return.
· Refuses to list their SSN or PTIN or refuses to sign the return, as required by law.
Compliments of VXL Services, a Business Consulting Services Company that provides Tax Planning and Tax return preparation to Individuals across US. Please contact Prakash Iyer CPA
We also provide Accounting, Tax, Payroll, Consulting and Company Incorporation Services to Start ups, Small and Medium Sized companies across US. If you have any questions please contact us at (732) 983 – 4150 or visit us at www.vxlservices.com for all the various Business Packages that we have to offer.