After you sweep up the confetti on New Year’s Day, another festival requiring reams and reams of paper begins. That’s right, it’s tax time. As you’re gathering your pay stubs and receipts in preparation for your annual headache, it might be worth considering whether you need a tax preparer to assist this year.
The IRS maintains a “priority” line for tax professionals, which is the first reason you should consider hiring one. While the wait times there will be just as long, it won’t be you who has to do the waiting.
Second, the IRS has less ability to enforce and investigate tax returns. This means you can be a little bolder in claiming a deduction or credit you might be entitled to, but it also means you need to streamline your return for easy processing. A professional tax preparer will be able to help you accomplish both of those goals.
The problem, though, is that tax returns have become an increasingly common target for fraud. Criminals file bogus returns on behalf of identity theft victims. An unscrupulous tax preparer may also file negligent returns designed to get big refunds deposited into their own accounts. This can leave you robbed of your return and facing serious IRS penalties.
When you choose a tax preparer, you need to be sure you’re getting someone who will keep your best interests at heart. You need to do your homework and only entrust your financial information to a certified professional.
Here are three steps to help you find one.
1.) Do it by the numbers
The IRS doesn’t have the authority to regulate tax preparers. In 2014, all professional preparers were required to obtain a PTIN (preparer tax identification number) which meant they were regulated. A federal court decision, though, ruled that the program overstepped the IRS’s authority.
The IRS Return Preparer’s Office has a compromise program. While preparers are no longer required to have PTINs, those who are serious about being transparent can complete a voluntary continuing education program to receive one. If you’re going to sit down with someone and reveal all your financial secrets, make sure they’ve gone through the program.
2.) Get references
In the same way you’d ask your friends to refer you to a hairstylist or a contractor, you should ask around to see who uses a tax preparer. The odds are good you know someone who does because 60% of Americans hire someone to help with their tax returns. If all of your friends file their own taxes, consider asking the owner of a local business you frequent. Small business tax preparation is incredibly complicated, but a good tax preparer can save a small business owner good money. They may be willing to refer you to their tax preparer.
You can work backward, too. Before you sit down with a tax preparer, ask him or her for the names of happy clients. If you don’t get any, think twice. Tax professionals work on the same reputation-based advertising that drives other service professionals. Someone who’s not willing to talk about success stories may not have any.
3.) Go big
If all else fails, you can know that a big corporate tax preparer won’t rip you off. These companies have been around a long time and don’t stay in business by robbing customers. Their size and stability can provide some safety.
That size, though, can also create problems for them. Their training programs are not as rigorous as the education that independent preparers usually have been through. They also tend not to retain employees for very long, leading to a lot of inexperienced preparers. Be sure you ask critical questions about the moves they’re making.
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