Plenty of people think they can file their own taxes but they really need to keep in mind they might be missing opportunities to get tax refunds by doing it themselves. Because they might not truly understand the full scope of the tax law, they might not be able to take advantage of all the deductions they possibly could.
Angie’s List’s tips for hiring tax help:
- Hire help or go alone? It’s probably fine for most people with simple tax situations to prepare their own returns. However, for those with more complex situations, calling a professional is the way to go. Consider having the same person prepare your taxes every year. The longer you work together with someone, the more familiar they become with your needs — and the more likely they are to do a great job for you.
- Check credentials: Few states require tax preparers to be licensed, so it’s up to you to find a qualified and reliable professional. Good bets are CPAs, tax attorneys, and enrolled agents – they are required to undergo education and testing requirements. Ask the preparer about his/her training. Will they represent you in case of an audit? Will you be able to contact them after the return is filed? Reputable tax preparers will ask to see receipts and will ask multiple questions to determine whether expenses, deductions and other items qualify. By doing so, they are trying to help their clients avoid penalties, interest or additional taxes. Angie’s List collects reports on tax preparers and accountants – read reviews as part of your research when hiring.
- Ask for an estimate: There is a wide range of tax preparers with varying fees, so know up front what you’re paying for. Beware of preparers who claim they can obtain larger refunds than other preparers. Fees are generally determined by an hourly rate.
- Money-saving tip: Get all your receipts organized to cut down on the amount of time your tax preparer has to pour over your finances.
- Get references: Ask questions from clients who have used the tax preparer before. Were they satisfied with their service?
- Do your research: Visit the IRS online. It’s a great resource for all the forms you need, as well as finding out what free assistance might be available to help you navigate the process. You can also learn about current tax schemes and scams.
- Make sure your pro is filing online so you can get a quicker refund: The IRS claims the e-file option is fast, secure and those who elect for a direct deposit can get their refund in as little as 10 days.
- Double-check your math and data entries and review your entire form: Math errors are some of the most common mistakes on tax filings. Make sure your Social Security and other identification numbers are correct. If you’re filing a joint return, make sure you both sign and date the form.
- Check your return: Although the preparer signs the return, you are responsible for the accuracy of every item. Read it carefully and ask the preparer for a copy of the return.
- Keep track of your paper trail: The IRS has three years to audit returns, so they suggest holding on to your paperwork for at least three to seven years.
- Consolidate the clutter: If your pile of receipts has gotten out of control, try photocopying as many as you can onto a single sheet of paper, or scanning them onto a single computer file. It will be easier to organize your invoices, save room and keep your accountant from being buried under an avalanche of paperwork.
- File even if you owe the IRS, but can’t pay: Submit the tax return by the due date and contact the IRS to ask if you can set up a payment plan. The IRS will charge a fee to set up a payment plan, but if you can’t pay all at once – this is the best approach. The same applies to your state return.
Small business owners: Take all of your records from your business — your checkbook, prior tax returns, and any documents you received from the IRS. When in doubt about a form, take it to your tax preparer to let him or her decide if it’s something they need.