Tax season is on and it is quite obvious that taxpayers are looking for a tax preparer. A tax expert can help you in preparing complex taxes, avoiding unnecessary taxes and receiving maximized tax benefits under the law.
If you are able to pick someone who commands expertise with the kind of taxes that you are required to pay, the situation will be pretty merry. However, things can turn awry if the choice of a tax preparer is not appropriate.
To ensure that you make a fine choice with the tax preparer and get your taxes filed correctly, you must give in some thoughts. Here are the questions that should ask before hiring a tax preparer:
1. Ask for Their Valid PTIN
IRS has a tool that suggests Tax Preparer. In the tool’s introduction question “What types of tax preparers does the directory include?”, it answers “All preparers listed have a valid Preparer Tax Identification Number or PTIN”. That explains the importance of PTIN in a big way. Without a valid PTIN for the year, the preparer is not allowed to prepare the returns.
Since such fraudulent tax preparers are not allowed they might prepare the taxes for you and ask you to sign it as self-prepared. They might support it with a claim that returns files by the professional are more likely to be audited. This claim is false.
Along with that, if anything goes wrong the with auditing, the tax preparer will not be considered responsible. PTIN is your best way to stay safe. So, that’s the first thing to ask.
2. Ask How Effective They Can Be With Your Unique Tax Needs
Your tax returns will depend on a number of factors. Kind of industry that your business belongs to, state and locality your business is located in, etc. are some of those factors. Now the familiarity and expertise of the tax preparer with such factors can be a great booster not only in filing the tax returns quickly but with the tax savings.
Go ahead and ask the tax preparer for the peculiar benefits that they can earn for you. Since you understand your business better than most, it might not be tough to see if they actually have real help to offer or just playing a bluff. For the state-based concerns, you can inquire for the number of clients in the state that they have served.
3. Fees Determination Pattern They Adopt
What amount a tax preparer charges is a different topic as compared to how they determine the fees. Schedules, supporting forms, local returns, etc. are some of the factors on which the fees of tax preparers will depend. Ensure that you are able to understand the fee components before finalizing the tax preparer. Ask them in detail about their fee structuring.
Some tax preparer may offer incentive-based fee structure, where final amount of fees will rely on the refund that you get. That may sound lucrative as the tax preparer will give in more efforts to save money for you. However, it is likely that they might go with credits and deductions that are not appropriately applicable.
4. What Technology They Use
Excel spreadsheets have been overshadowed by tax software and almost every active tax preparer is working on advanced tax software. But which one? Are you familiar with the software? In case you have to fill or check certain information in software, will you be able to do that?
Ask for the tax software that they work on and try to pick a tax preparer, who work on the software you are familiar with or has all the features that you need.
Along with the software, look for the solutions that help you stay in touch with the tax preparation so that you can track the progress whenever you want. Hosting the tax software on the cloud can get that done for you.
5. When Can The Returns Be Expected
That’s what all boils down to. IRS is pretty serious with the deadlines and you must adhere to them. So, ask your tax preparer to file the tax returns well before the deadlines. This will ensure that you can escape the possibilities of penalty. Remember to collect a copy of the returns filed by the tax preparer.
And there is no good in going with a tax preparer who is not able to give a reliable time window. Better if look for another one.