Many people pay to have their taxes prepared. You need to be careful when you pick a preparer to do your taxes. You are legally responsible for all the information on the tax return even if someone else prepares it. Here are nine tips to help you choose a tax preparer:
1. Check the preparer’s qualifications. All paid tax preparers are required to have a Preparer Tax Identification Number or PTIN. An Enrolled Agent focuses on taxes and has passed a series of tests administered by the IRS to allow them to practice. CPAs and Attorneys have taken tax classes – look for one who focuses on tax rather than other areas of accounting or law.
Enrolled Agents, CPAs and Attorneys can represent you before the IRS, so you don’t have to deal with them yourself. They are required to take many hours of continuing tax education and ethics.
You may see a preparer with RTRP or AFSP after their names. These people have passed a test on taxes and made the commitment to take continuing education each year. They have limited representation rights in dealing with the IRS, can only deal with some departments and only about returns they have prepared.
2. Check the preparer’s history. You can check with the Better Business Bureau to find out if a preparer has a questionable history. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status.”
3. Ask about service fees. Avoid preparers who base their fee on a percentage of your refund or those who say they can get larger refunds than others can. Always make sure any refund due is sent to you or deposited into your bank account. You should not have your refund deposited into a preparer’s bank account.
4. Ask to e-file your return. Make sure your preparer offers IRS e-file. Any paid preparer who prepares and files more than 10 returns generally must e-file their clients’ returns. The IRS has safely processed more than 1.3 billion e-filed tax returns.
5. Make sure the preparer is available. You need to ensure that you can contact the tax preparer after you file your return. That’s true even after the April 15 due date. You may need to contact the preparer if questions come up about your tax return at a later time.
6. Provide tax records. A good preparer will ask to see your records and receipts. They ask you questions to report your total income and the tax benefits you’re entitled to claim. These may include tax deductions, tax credits and other items. Do not use a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.
7. Never sign a blank tax return. Do not use a tax preparer who asks you to sign a blank tax form.
8. Review your return before signing. Before you sign your tax return, review it thoroughly. Ask questions if something is not clear to you. Make sure you’re comfortable with the information on the return before you sign it.
9. Preparer must sign and include their PTIN. Paid preparers must sign returns and include their PTIN as required by law. The preparer must also give you a copy of the return. If the preparer gives you a return that says it is self-prepared, they are not following the rules and probably don’t have a PTIN.