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Choosing a Tax Preparer

By Vena Stevens, Gateway EITC Community Coalition

Date:   January 9, 2015

Tax season is quickly approaching.  Knowing a few simple facts about tax preparation and filing will help you avoid mistakes and may even save you money.

There are several options for preparing and filing your federal income tax return. You can prepare and file your own tax return.  This is a good option for someone who has a simple return. Those making less than $60,000 for the 2014 tax year can even do this for free online through www.MyFreeTaxes.org and the IRS Free File website.

The majority of Americans will have their returns done for them.  There are some things that are important to know before deciding on a tax preparer. There is currently no U.S. regulation or minimum educational requirement for tax preparers. Only four states have regulations; Missouri is not one of them. According to the IRS, about 60% of tax preparers operate without any oversight or educational requirements.

Options for having your taxes prepared:

  • Certified Public Accountants (CPAs) – Make sure they specialize in individual income tax returns.
  • Enrolled agents (EAs) – EAs are federally licensed tax preparers.
  • Tax preparation chains – Preparers found in tax preparation chains are not CPAs or EAs and are not required to have professional training or pass any tests. They are likely to have varying degrees of training and experience.
  • Individual storefront tax preparers – These are not usually CPAs or EAs and often have no tax law training at all.
  • Free tax preparation – This program is available to households making $53,000 or less, persons with a disability, and the elderly. All preparers are certified by the IRS. Call United Way at 211 for site locations and hours.

Tips for Choosing a Tax Preparer:

DON’T

  • Use a preparer who bases their fee on a percentage of your refund
  • Use a preparer who claims that they can get larger refunds than other preparers
  • Use a preparer who claims they can get you your refund faster
  • Use a preparer who offers to give you a portion of your refund when you leave their office
  • Use a preparer who operates another business such as, car dealerships, furniture stores,  or those who provide other financial products such as prepaid cards and check cashing

DO

  • Ask about preparers experience and credentials
  • Get a recommendation from a friend or family member
  • Make sure you can contact preparer after tax season, should there be a problem
  • Get a written price quote before agreeing to use the service – If they refuse, go somewhere else

Other Dos and Don’ts:

  • Do keep all relevant financial documents in an accordion or similar file to bring with you
  • Do check your return before you sign it
  • Do ask preparer to explain anything you don’t understand
  • Do get a copy of your return and a breakdown of fees before the return is filed
  • Don’t allow a preparer to deposit a refund into his or her account
  • Don’t sign a blank return

 

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