How to pick a tax preparer

Couple talking to tax preparer

Choosing a tax preparer is one of the most important decisions you’ll make during tax season. You have two options: Prepare your own return or have someone else do it. If you’re not comfortable preparing your own return and choose to pay someone, there is no shortage of tax preparation firms or independent consultants to choose from. So how do you choose a tax preparer?

Check for credentials

A professional preparer is responsible for accurately preparing your return based on the information you provide. In addition, this person needs to be up-to-date on any tax law changes for the year and able to answer questions about your tax return that you or the IRS may have. Professional tax return preparers are registered with the IRS by their preparer tax identification number (PTIN). Use a preparer who readily supplies the PTIN.

While the preparer is responsible for inputting the data correctly, you are still ultimately responsible for providing accurate information for the items reported on your tax return.

Check on their reputation

Take a look at the IRS Directory of Federal Tax Return Preparers. Consider how long the individual or firm has been preparing taxes and the probability of the preparer being around in the future for questions. You can also search for level of credential, as well as location, in this database.

You can learn more about the individual or firm’s reputation by reading online reviews and from the Better Business Bureau. If you have friends or family who have used the individual or firm you’re considering, ask about their personal experience with the preparer. Before you make a final selection, discuss with the tax preparer the kind of support offered both during and after tax-preparation season. Make sure the preparer signs the tax return and provides you a digital or hard copy willingly.

Will they provide help with a tax audit?

It's also important to ensure your preparer will be around long after tax season ends. You might need the preparer to answer questions about the tax return or help you with an audit.

This last trait is very important, since audits can happen regardless of how accurate your return is. Your tax preparer should also be able to speak with the IRS on your behalf concerning payment or refund issues, and mathematical errors.

Know when to walk away

There are certain red flags to look out for, when choosing a preparer. Think twice about using anyone who:

  • Promises you a larger refund than any other preparer.
  • Bases a preparation fee using a percentage of your tax refund.
  • Suggests you deposit your refund into a business account with promises to transfer funds to you later — with or without interest.
  • Asks you to sign a blank return.
  • Doesn’t require full documentation of all your income sources or deductions. The tax preparer should require every relevant piece of documentation you have.
  • Implies endorsement by the IRS. There are no IRS-endorsed tax professionals.

If you see any of these warning signs, it’s best to keep looking for the right preparer.

Get, reputable expert help

Let LGFCU assist with discounted tax help at a branch near you. You can also prepare your own taxes online with TurboTax, where Credit Union members can get a discount.

 

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