By now, most people have received their tax documents, which means it’s time to start preparing to file your federal tax return. More than half of taxpayers use a paid tax professional to help with tax preparation.
Even if you hire a tax preparer, it’s important to remember this:
You are still responsible for everything on your tax return.
That’s why choosing the right tax professional matters.
Here are a few quick tips to help you choose the right tax preparer and avoid problems later.
1) Availability After Filing Season
Choose a tax professional who is available after tax season ends. Questions often come up after filing, and some taxpayers receive IRS letters weeks or even months later.
A reliable tax preparer should still be reachable if you need help after you file.
2) Service Fees
Ask upfront about the preparer’s tax preparation fees.
Taxpayers should avoid tax return preparers who base their fees on a percentage of the refund. This is a major red flag and can encourage dishonest practices.
3) IRS e-file
Make sure your preparer offers IRS e-file.
The IRS issues most refunds in fewer than 21 days for taxpayers who:
File electronically using IRS e-file
Choose direct deposit
File a complete and accurate tax return
4) Records and Receipts
A good tax preparer will ask to see your records, receipts, and supporting documents.
If a preparer doesn’t ask for documentation, that may be a sign they are not preparing your tax return correctly.
5) Qualifications and Credentials
Before hiring a tax professional, take time to understand their credentials and experience.
You can also check their history for complaints or disciplinary actions. This is especially important when choosing someone to handle your federal tax return.
6) Review Before Signing
Always review your completed tax return before you sign it.
Ask questions if anything looks unclear or incorrect.
Never sign a blank or incomplete tax return.
7) Accurate Bank Account Information
Make sure any refund goes directly into your bank account, not your preparer’s.
Before filing, double-check the routing number and account number on your completed tax return to confirm the refund is going where it should.
PTIN Requirement: A Must for Paid Preparers
By law, anyone who is paid to prepare (or helps prepare) federal tax returns must have a valid Preparer Tax Identification Number (PTIN).
Paid tax return preparers must also sign and include their PTIN on any return they prepare.
Tax Preparer Red Flags
Be cautious if a preparer:
Does not sign the tax return
Promises an unusually large refund
Charges fees based on the size of the refund
These are common warning signs of tax return preparer fraud.
Unfortunately, tax return preparer fraud is a common tax scam.
The IRS provides guidance to help taxpayers avoid dishonest preparers. If you have been financially harmed by a preparer’s misconduct or improper tax preparation practices, you can file a complaint.
If you want to verify a preparer’s credentials, the IRS provides:
IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications
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