NEW YORK, Feb. 5, 2009
When To Hire A Pro To Do Your Taxes
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Tax Preparer Responsibilities
There are no studies that suggest that tax professionals get bigger refunds for their clients. Having a tax professional prepare your taxes is no guarantee that you’ll file an error-free return. In 2006, the Government Accountability Office had tax returns prepared at 19 outlets of tax preparation chains and they found mistakes in all of them.
But there are strong incentives for tax preparers to accurately complete your returns. An income tax preparer can be subject to civil penalties and barred from practice for knowingly preparing returns or claims for refunds that understate your tax liability or overstate the refund based on unrealistic information. While preparers are not required to review all of your tax documents or statements to independently verify your information, they must make reasonable inquiries if what you gave them appears to be incorrect or incomplete, relative to the deductions you intend to claim.
Having a preparer's signature at the bottom of your return doesn’t mean it has more credence with the IRS. But it should give you comfort to know that a signing preparer generally is viewed under the regulations governing tax preparers to have overall authority over the accuracy of the client's tax return and, as a result, could be subject to penalties for taking unreasonable positions on deductions, etc.
What You'll Need
Whether you’ll prepare your own return or seek the help of a professional, the first thing you need to do is to get your tax information organized. Gather any and all records that you will need:
Use A Tax Pro To Back Up Your Work
A lot of folks are tempted to save on a tax pro’s fee by "following last year's forms" to prepare this year's tax return. I don’t recommend doing that but, if you do, at least hire a tax pro to look over what you did to determine if you prepared your return correctly and are using all of the forms you might need to file. According to H&R Block's "Second Look" service, they’ll offer to review your 2008, 2007 and 2006 tax returns - regardless of who prepared them - for accuracy and to ensure you have claimed all eligible credits and deductions. Their fee for this service is $29 per return. They claim to have found errors on four-out-of-five 2007 returns they reviewed for folks who took them up on the offer.
Finding A Tax Preparer
Tax preparation professionals can offer a variety of services beyond completing your return. They can be more familiar with the tax saving strategies unique to your situation or profession. They can help you organize and plan for next year’s taxes by suggesting what records to keep and what financial moves to make this year that can lower your 2009 tax liability. They can also help you determine if you are required to pay estimated taxes each quarter and calculate what to pay and file each quarter. The bottom line is to make sure the preparer you choose to work with offers the services you need.
The IRS does not require tax preparers to have a license or certification to prepare someone’s tax return for pay. Only a few states require a formal license to provide this service to the public. It’s recommended that you seek a tax pro who is an Enrolled Agent, Certified Public Accountant, or a Tax Attorney. These preparers have passed extensive examinations on tax matters, must stay current by meeting continuing professional education requirements, and are qualified to represent you if your return is audited. There are several associations and affiliations, such as the National Association of Tax Professionals, that encourage tax practitioners to obtain designations and adhere to professional standards of practice.
Asking family, friends and co-workers about whom they use is the most common advice given for seeking out a tax preparer. Also, search for a tax preparer near you through trade organizations such as the National Association of Tax Professionals and read their online brochure, “Finding the Right Tax Preparer.” Ask for references and check them. You should interview a tax preparer before you hire him or her.
How Much And How To Pay
The cost of your return will vary depending on the complexity and completeness of your information. Being well-organized and having excellent records is a common reason for discounting fees by tax preparers.
Preparers charge in a variety of ways. Some use a set fee for each form and schedule, others use a fee based on the prior year's cost adjusted for changes in the client's situation, and others use a formula of billable hours based on the IRS guidelines for time estimated to complete certain forms. Others charge a flat fee per return, and still others charge for actual time spent to prepare your return and provide other services. The best way to proceed is to present all of your information and get a firm estimate before you agree to go forward, especially if this is the first time you are working with this person.
A fee arrangement to avoid is where a tax preparer bases their fee on a percentage of your refund. Also, when the tax preparer is employed by a chain that bases its pay on the number of returns they prepare, this should raise a concern about the incentive to produce a high volume of returns, which could compromise the quality of their work.
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- It is impossible for someone who has any knowledge at all of taxes to miss paying self employment taxes on earned income.
Also, Turbo Tax software asks you questions about any income you enter that are not wages.
Geitner knew exactly what he was doing. He is nothing more than a tax cheat. - Reply to this comment
- The authority of the federal government to collect its income tax depends upon the 16th Amendment to the U.S. Constitution, the federal income tax amendment, which was allegedly ratified in 1913. After a year of extensive research, Bill Benson discovered that the 16th Amendment was not ratified by the required 3/4 of the states, but nevertheless Secretary of State Philander Knox fraudulently announced ratification.
Webmaster''s Commentary:
Now remember that the people telling you that Benson is wrong and the 16th Amendment was ratified are the same people who told you Saddam had nuclear weapons.
Because of the Iraq nuke deception, we KNOW that the US Government lies to the people. Is it really so absurd to imagine that they lied to open a permanent door into your wallet? - Reply to this comment
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