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How to choose an income tax preparer

Income-tax Caculator Forms Notebook Files Pens 4097292_1920If you have someone prepare your income taxes, make sure you choose wisely.

A paid tax return preparer is largely responsible for the accuracy of your return and, by law, is required to sign the return and include their preparer tax identification number or PTIN on it.

Although the preparer always signs the return, you're responsible for the accuracy of every item. Anyone paid to prepare tax returns should have a thorough understanding of tax matters and is required to have a PTIN. Ask friends, co-workers, or your employer for recommendations.

Also, get an estimate from the tax preparer. I had a problem with H&R Block several years ago. I couldn’t get an estimate from the receptionist on how much it might cost to get my taxes prepared, nor could I get an estimate when I took my draft forms in and showed them to a tax preparer.

The tax preparer said he’d give me an estimate when he finished my return. Then, I could accept or reject his work. I was shocked when he said the fee would be $472. I was worn out dealing with my taxes, so I paid the high fee.

It looks like H&R Block charges about $100 per schedule. They should just tell you that.

When you choose a tax preparer, pick one you'll be able to contact if the IRS has questions on how your return was prepared. You can designate your paid tax preparer or another third party to talk to the IRS about the preparation of your return, payment/refund issues, and mathematical errors.

Most income tax preparers provide good service to their clients, according to the IRS. However, there are dishonest tax preparers who file false returns or try to steal your refund. You should always check your return for errors to avoid potential financial and legal problems.

The IRS offers these tips for selecting a tax preparer:

  • Be wary of tax return preparers who claim they can obtain larger refunds than others can.
  • Avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of your refund into their financial accounts.
  • Ensure you use a preparer with a PTIN. Paid tax return preparers must have a PTIN to prepare all or most tax returns.
  • Use a reputable tax professional who enters their PTIN on the tax return, signs the tax return, and provides you a copy of the return, as required.
  • Consider whether the individual or firm will be around for months or years after filing the return to answer questions about the preparation of the tax return.
  • Never sign a blank tax form.
  • Check the person's credentials. Only attorneys, CPAs, and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collections, and appeals. Other tax return preparers who participate in the IRS Annual Filing Season Program have limited practice rights to represent taxpayers for audits of returns they prepared and signed.

See the IRS’s “How to Make a Complaint” if you’ve been financially impacted by a tax preparer's misconduct or improper tax preparation practices. See “Abusive Return Preparers” for more information.

Comments

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Baby_boomster

My tax preparer is the brother of one of my high school friends so he's been doing my taxes for a long time. So far, only 1 mistake where I ended up paying more than he had estimated. He is retiring but said he'd still continue to do my taxes. I'm surprised that H & R Block is so expensive.

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