Tax preparation is a field that can impact you in various ways depending on the professional you plan to trust in this regard. When not appropriately filed, Income Tax Returns can lead to audits and investigations from the Internal Revenue Service. This can be a mental and financial hassle, making you wonder why you didn’t spend time researching reliable candidates for the task.
Tax preparers can levy many hidden fees, translating to added stress for you as an individual. An estimated 60% of Americans pay for tax preparation services, with these professionals filing nearly 78 million returns each year[1]. These stats highlight the role that tax preparers play, but at the same time, they can become a nuisance if you choose to trust the wrong individuals.
This article will discuss how ....
Experience makes all the difference.
Tax preparers have a lot to lose in terms of reliability and experience like any other service provider. Amateur service providers might portray a composed outlook, but at the end of the day, they can fail to deliver on promises causing massive inconveniences to you. With added penalties and the hassle of audits, you can find yourself buried under enormous piles of documentation and problems from the Inland Revenue Service.
Knowledge of tax laws is crucial.
Tax laws can be pretty complex and complicated to comprehend for average individuals, which is why most Americans choose to trust tax preparers in this regard. A professional service provider has the experience and knowledge to provide you with the services you need. Tax laws and the relevant codes can also change over time, requiring extensive compliance efforts beyond the scope of service providers that don’t have the necessary knowledge.
Adhering to code and ethics can go a long way.
Many people believe that tax preparation can be an insanely expensive proposition. Average monthly costs for tax preparation can range between $17 to $42. This price may seem steep for some, but considering the benefits and relief this provides over the year is worth the investment. You might attempt having to file tax returns on your own. Still, a reliable professional can offer something beyond costs, and that is a sense of satisfaction that the process has been executed thoroughly.
Trusting unreliable tax preparers can have hefty consequences.
It is known that as a nation, Americans hate doing their taxes. Millions put off the process until the last moment and, in their haste, end up trusting the wrong tax preparers. The results are a host of issues. Low-cost professionals might lack even basic facilities like appropriate storage for confidential information. These tax preparers may also not be available throughout the year to support you with any service provider errors in return filing.
Adequate tax preparation is affordable.
Many people believe that tax preparation can be an insanely expensive proposition. Average monthly costs for tax preparation can range between $17 to $42. This price may seem steep for some, but considering the benefits and relief this provides over the year is worth the investment. You might attempt having to file tax returns on your own. Still, a reliable professional can offer something beyond costs, and that is a sense of satisfaction that the process has been executed thoroughly.
Qualities to look for in a tax professional
Picking a reliable tax professional can be challenging. However, it is worth the research before you trust a preparation professional. Credentials and qualifications, including Certified Public Accountant (CPA), Accredited Tax Preparer (ATP), Enrolled Agent (EA), Accredited Tax Advisor (ATA), and 2017 IRS Annual Filing Season Program participants are crucial for a reliable tax preparer. Your respective state might also have additional requirements that should be considered.
Here are some of the factors to consider before picking your tax preparation expert;
Verify PTIN of the tax preparer
PTIN or IRS Preparer Tax Identification Number is the most fundamental factor to note for a tax professional. The IRS mandates all tax preparers to have a PTIN number, and they must add this number when filing your returns. This is required by law, and the preparer must provide a copy of their own return. Make sure you clarify these basics with the professional before entrusting them with your tax filing.
Check Professional Credentials
Next, make sure that you check their credentials, such as the ones listed above, e.g., EA, CPA, AFSP, etc. Professional tax preparers are part of professional and well-reputed organizations while also attending regular educational sessions to stay abreast with recent developments.
This information for reliable professionals is readily available and is provided on request. Although professional credentials are not mandated for a tax preparer, it is vital to make sure that you understand that their qualifications support their education and experience.
Watch out for red flags.
There are a lot of red flags when it comes to tax preparers. These can become evident if you know how to verify their relevant credentials. One such issue is that the professional tells you that their fee will be based on a percentage of your refund. Also, stay wary of service providers who claim they can get you larger refunds than other professionals. Moreover, don’t trust a preparer willing to e-file tax returns without W-2 form and just based on your last pay stub, as this is against IRS e-filing rules.
Conclusion
Tax preparation is a complex job that needs proper assessment, knowledge, and expertise. Many service providers can claim to offer something when they don’t have the capacity to deliver. When you go out to pick a professional and reliable tax preparer, choose someone who is equipped with the relevant knowledge to judge the extent of their expertise based on the factors listed above. These elements are crucial if you want peace of mind throughout the year, especially with respect to your tax returns.
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