How to Choose a Tax Preparer

Choosing a Tax Preparer

This year, tax season opens up on January 28th. By April 15th, individuals must file their annual tax return. One way that a person can do their taxes is by hiring a tax return preparer.

What is a tax return preparer?

A tax return preparer is an individual who is qualified to calculate, file, and sign income tax returns on behalf of individuals and businesses. In addition, they can represent a taxpayer during IRS examinations of tax returns.

How to choose a tax preparer

There are many things that you should consider when choosing a tax preparer. They include:

1. Check the person’s qualifications

All paid tax return preparers must have a Preparer Tax Identification Number (PTIN). Make sure that the preparer you are considering has one. In addition to making sure they have a PTIN, ask if they are affiliated with any professional organizations and if they attend continuing education classes.

2. Check the preparer’s history

Be sure to check the preparer’s history with the Better Business Bureau. This will allow you to check for any disciplinary actions and licensure status.

3. Make sure the preparer is accessible

You should choose a preparer that is accessible to you. Make sure that you’ll be able to contact your preparer during the process, and even after your taxes are filed, in case you have any questions.

4. Find out their service fees

Check service fees upfront. Avoid any preparers who base their fee on a percentage of your refund. You should also avoid any preparers who say that they can get you larger refunds than others can. Make sure that your refund is sent to you or deposited into an account with your name. No part of your refund should be directly deposited in the preparer’s account.

5. Ask if they offer electronic filing

If a paid preparer prepares and files more than 10 returns for clients, they must file the returns electronically. The only exception to this is if the client opts to file a paper return. Be sure that your preparer offers IRS e-file.

6. Provide all documentation

A reputable preparer will ask to see any records and receipts. They also should ask you multiple questions to determine your total income and any qualifications for expenses, deductions, and other such items. If your preparer says they can electronically file your return before you receive your W-2 form by using your last pay stub, this is a red flag! Doing so is against IRS e-file rules.

7. Never sign a blank return

Avoid preparers who ask you to sign a blank return.

8. Review return before signing

Before you sign your return, make sure to review it and ask any questions you may have. Make sure that you understand everything and are comfortable with the accuracy of the return. Once you are ready to sign, make sure that the preparer also signs with the PTIN, as it is required by law.  After the return is signed, make sure that the preparer gives you a copy.