Is Your Tax Preparer Doing a Good Job?
If you employ a tax preparer to handle your taxes each year, it is vital that you know you have hired someone capable of doing a good job. If your tax returns are not accurate or handled appropriately, the Internal Revenue Service can select you for an audit and complicate your life in a variety of ways.
As tax preparation can be very complex depending on your financial life, many people will turn to the professionals for help. There are some that prefer the quick and easy tax prep companies based in local malls and some that maintain a long-term relationship with a CPA firm for their tax preparation needs. Regardless of which road you choose to travel, you should always ensure your tax preparer is trustworthy and committed to your best interests.
There have been plenty of headlines about supposed tax preparation professionals were anything but professional. Individuals have been caught in a variety of tax-related scams including theft of refunds, fraudulent tax credits, and failing to file customer returns at all.
Warning Signs You Shouldn’t Ignore
Sometimes figuring out if your tax preparer is doing a good job is better analyzed by looking for things they shouldn’t be doing. For instance, there may be some professionals that guarantee huge refunds before even looking at your documents.
Red flags should also go up immediately if your tax preparer uses a commission-type payment policy. In other words, if your tax pro bases his or her fee on your refund amount, find someone new as soon as possible. Reputable businesses will charge an hourly rate or a flat rate based on the preparation work being done.
Another way to tell if a potential tax preparer is qualified to even handle the work is to check with the IRS. Previously, anyone could prepare taxes but the rules have since changed. Those completing tax work on someone else’s behalf need to be certified. To prove this certification, the IRS provides eligible tax service providers with an identification number known as a PTIN (Preparer Tax Identification Number). Unlicensed workers can potentially pose a risk to you should they try to inflate numbers to score a bigger refund for you and a larger payday for themselves.
Rely on Your Instincts
The IRS recommends all taxpayers review their tax information prior to submitting returns to check for common errors or inaccurate information. Even small mistakes can delay a refund and can cause complications in your filing which may trigger an audit. Even the IRS admits that regular reviews of submitted returns contain mathematical errors or improper information when prepared by certified tax professionals. Tax pros have also been found to miss important deductions, declare too many exemptions, and basically not follow common tax laws in the best interest of their clients.
Working with a tax professional in person may provide you with a better feel for whom you should trust and whom to avoid. If you feel rushed or talked down to during an appointment, this may be enough of a reason to find someone else. Your tax preparer should be willing to save you the most amount of money and be able to provide you with reasonable answers to your questions and concerns.
Finding a Better Match
If you feel you need to find a new tax specialist, make sure you go into the process with both eyes open. Start by asking for recommendations from people you trust who have been satisfied with their tax pro. These referrals may lead you in the right direction but still do some research on your own. In addition to the IRS certification confirmation, you should also search for complaints online, starting with the Better Business Bureau.
You should also meet with the tax professional in person to get a feel for how well you can work together. You want someone who you feel comfortable with, especially if your tax situation is more complicated than normal. For instance, if you are self-employed, you may have a more complex tax situation than someone who files single with no dependents and only one source of income. You should feel as though the tax pro is working with you every step of the way rather than just trying to rush through the process.
Don’t be afraid to discuss the individual’s professional credentials either. Tax prep specialists should always be advancing their education on changing tax laws each year. Accredited tax professionals are required to be up-to-date with their tax education and this will help ensure you are working with someone who really knows what is going on and can genuinely help you file your taxes correctly.
Simon Zhen is a research analyst for MyBankTracker. He is an expert on consumer banking products, bank innovations, and financial technology.
Simon has contributed and/or been quoted in major publications and outlets including Consumer Reports, American Banker, Yahoo Finance, U.S. News – World Report, The Huffington Post, Business Insider, Lifehacker, and AOL.com.