Did you know that $3.71 trillion in taxes was collected in 2020?
You’ll undoubtedly need to employ tax services this year if you don’t have the time to spend hours filling out your own tax forms, if your tax situation is complicated, or if you simply don’t know where to start. Don’t give your hard-earned cash to just anyone, though.
If you are wondering how to find the right person for filing taxes, keep reading to learn about what questions you should ask!
1. Do You Have a PTIN?
All preparers that prepare returns for payment are required by law to get a preparer tax identification number (PTIN), according to the IRS.
If a preparer withholds their PTIN number from you or redacts it on your copy of the return, don’t take it personally. It might be a preventative measure to thwart thieves who steal PTINs. To be sure, you can look up the preparer in the PTIN directory maintained by the IRS.
2. What Is Your Education and Training?
Tax return preparation does not require formal education or training; obtaining the PTIN online might have only taken 15 minutes. But it’s important to know that good preparers still have it.
The PTIN is not a guarantee that a particular kind of preparer is the best option for your tax filing needs when picking a tax preparer. Regarding “representation rights,” or the tax preparer’s capacity to speak for their clients in situations including audits, payments, collection problems, and appeals, there are significant variations among tax professionals.
Acceptable credentials include those of an enrolled agent (EA), lawyer, certified public accountant (CPA), or someone who has just finished the IRS’s Annual Filing Season Program (AFSP).
Additionally, find out if the preparer is a member of a professional organization, then confirm this affiliation. On organization websites, you can frequently do that fast and efficiently. Members of many of these organizations are expected to abide by a set of moral principles and best practices.
3. How Long Have You Been at This Location?
A tax preparer may occasionally relocate to a larger or nicer office, but Hockenberry advises clients to be wary of those that frequently change locations.
Preparers who appear to be con artists frequently move around. They may milk a region before moving to another state. Look for complaints on the websites of the Better Business Bureau and your neighborhood chamber of commerce.
4. Where Will My Refund Be Deposited?
Remember, this is a trick question, so act cool. A warning sign is if the preparer requests that the IRS deposit your tax refund into an account under their direct control.
Always have it go into your bank account. Never deposit money into another person’s bank account. It’s unlawful if they claim that they have a bank account set up into which you can deposit your refund and from which they will then deduct their charge.
A refund-anticipation loan may involve a third-party bank, but it’s important to consider who controls the account.
5. When Should I Expect My Return?
The chances are considerable that the preparer won’t finish your return by the April deadline if they are taking on too many clients throughout tax season. That can need the preparer to give you a deadline extension, or worse, they might just abandon you.
That can also indicate a postponed tax refund. If you have unpaid taxes, your preparer’s backlog may also force you to pay an anticipated tax payment in April and maybe deal with fines and interest when the preparer finally figures out your actual tax liability.
6. Can You Represent Me?
Many preparers are more than eager to answer your audit inquiries or define a phrase, but not all of them have the authority to represent you before the IRS.
This is why you want a tax preparer who is at least an EA, CPA, or attorney. Even if they did not prepare your return, only individuals with those qualifications are permitted to represent you before the IRS.
Only under specific conditions and only if they prepared your return are preparers who hold an AFSP authorized to represent you.
7. Are You Available Year-Round?
You might not want to wait until next April to receive tax guidance. That’s why you should ask a tax planning professional if they work year-round.
After all, things do occur during the year. Marriages, deaths, childbirth, and modifications to tax laws are all things to consider. You may also need to pay business taxes.
The IRS advises utilizing a year-round tax preparer as opposed to one that works just or primarily during tax season. This makes it simple for you to get in touch with the preparer if you have any questions or worries about your taxes.
You shouldn’t really wait to talk about any number of things that could happen during the year because they might have a significant impact on your tax liability. So make sure you choose a tax planner that’s available at all times.
Ask These Questions When Hiring Tax Services
You might be eager to pay your federal and state income taxes and leave the difficult year in the past. Hiring a certified tax preparer can assist ensure that your income taxes are accurately prepared by a professional, whether you anticipate owing taxes or receiving a sizable return. Now that you’re aware of these questions be sure to ask them when hiring tax services!
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