It's almost the holiday season, and that means you'll soon be receiving your federal tax forms for the 2015 tax year.
Is this the year you finally decide to hire a pro to do your taxes? If so, here are some tips from the Internal Revenue Service (IRS) for choosing that person wisely:
Select an ethical preparer
- Taxpayers entrust some of their most vital personal data with the person preparing their tax return, including income, investments, and Social Security numbers.
Ask about service fees
- Avoid preparers who base their fee on a percentage of the refund or those who say they can get larger refunds than others. Taxpayers need to ensure that any refund due is sent to them or deposited into their bank account, not into a preparer’s account.
Be sure to use a preparer with a preparer tax identification number
- Paid tax return preparers must have a current PTIN to prepare a tax return. It is also a good idea to ask the preparer if she belongs to a professional organization and attends continuing education classes.
Research the preparer’s history
- Check with the Better Business Bureau to see if the preparer has a questionable history. For the status of an enrolled agent’s license, check with the IRS Office of Enrollment (enrolled agents are licensed by the IRS and are specifically trained in federal tax planning, preparation, and representation). For certified public accountants, verify with the state board of accountancy; for attorneys, check with the state bar association.
Ask for e-file
- Any paid preparer who prepares and files more than 10 returns for clients generally must file the returns electronically.
Provide tax records
- A good preparer will ask to see records and receipts. Do not use a preparer who is willing to e-file a return using the latest pay stub instead of the Form W-2. This is against IRS e-file rules.
Make sure the preparer is available after the filing due date
- This may be helpful if questions come up about the tax return. Taxpayers can designate their paid tax return preparer or another third party to speak to the IRS concerning the preparation of their return, payment/refund issues, and mathematical errors. The third party authorization checkbox on Form 1040, Form 1040A and Form 1040EZ gives the designated party the authority to receive and inspect returns and return information for one year from the original due date of the return (without regard to extensions).
Review the tax return and ask questions before signing
- Taxpayers are legally responsible for what’s on their return, regardless of whether someone else prepared it. Make sure it’s accurate before signing it.
Never sign a blank tax return
- If a taxpayer signs a blank return, the preparer could then put anything he wants on the return -- even his own bank account number for the tax refund.
- Preparers must sign the return and include their PTIN as required by law.
- The preparer must also give the taxpayer a copy of the return.
Most tax return preparers are professional, honest, and provide excellent service to their clients. However, dishonest and unscrupulous tax return preparers who file false income tax returns do exist. Always check any return for errors to avoid potential financial and legal problems. See information about Abusive Return Preparers, and learn How to Make a Complaint About a Tax Return Preparer.