Choosing to outsource your personal income tax preparation can be a smart option. Depending on your tax knowledge and the complexity of return, it simply makes sense to seek help from an experienced professional who should utilize all your legal options to maximize your return.
Not all tax preparers are created equal. With over 60% of Americans paying someone to prepare their taxes, there remains a wide margin between the best and worst services available for taxpayers.
Is Your Tax Preparer A Hip Hop Artist?
The Hampton Roads, Virginia case of Mo’ Money has so far left thousands of taxpayers without refunds. It is alleged that Mo’ Money Taxes presented false and misleading information to clients including failing to disperse refunds, and distributing checks that failed to clear. The franchise owners left the local area leaving shuttered offices with no resolution to the missing tax refunds. Local news station Wavy 10 reports that the owners are actually members of the Memphis, TN based hip hop group SWAT Game.
Avoid These Mistakes:
Rapid Refunds / Anticipation Loans: It’s tempting to want your tax return as soon as you file. The downside here is that you will pay hefty fees for the rapid refund privilege. The IRS processes and distributes most refunds in around two weeks anyway. Keep more of your own money.
Refund Sent To Tax Preparer: The Mo’ Money Taxes example above could be avoided if refunds were sent directly from the IRS to the taxpayer. This keeps you in control of your money. Once you have filed your return and paid your preparer their fee, that should be the end of the business relationship. There is no good reason for them to have access to your tax refund.
Insufficient Knowledge: Interview your tax preparer to ensure they have the right knowledge to prepare your personal tax return. Before you commit, discuss the specifics of your return and make a judgement as to their suitability for your needs. It costs nothing to ask.
Wrong Credentials: People in associated industries are not automatically qualified to prepare your taxes. Your insurance agent, financial planner, or bank manager are not necessarily qualified. At the very minimum your tax preparer should be an Enrolled Agent. These individuals have studied the tax code, passed a qualifying exam, and update their skills annually.
Choosing A Brand New Tax Preparer: Stability speaks volumes in tax preparation. A tax business that has been around for years is likely to have a track record with the IRS and Better Business Bureau. You want to choose a tax preparation service that will be there to assist in the event of a problem or audit.
Take the time to ask the right questions to ensure your tax preparer is trustworthy, knowledgeable, and qualified to represent you. Almost anyone can hang out a shingle with their name on it and claim to be a tax professional. It’s up to each of us to scrutinize their claims to avoid disasters like those experienced by the taxpayers of Hampton Roads.
How do you choose your tax preparer?