While for some, the Tax Cuts and Jobs Acts might have made their taxes easier to file, for others, tax filing is still a huge irritant and something that they dread having to complete every year. For every individual or company facing filing their taxes alone, tax preparers offer them a lifeline, and many seek their help, when tax season is upon them.
Do you need professional help with your taxes?
For anyone struggling to file their taxes, or for those who simply despise the task or don’t have the time, then the services of a tax preparer would doubtless be worth the cost. There are some circumstances – such as if you own or have started a business, and several others listed below – when using a tax professional is strongly recommended, even if you have the time to file yourself:
- You’ve made financial transactions involving real estate
- Your marital status has changed
- You or your business have made many investment losses or gains
- The income that you earn does not come from the state or country that you reside in
- You have made trust fund transactions
What questions should you be ready to ask your tax professional?
Giving someone access to your financial data is a big step, and one that should not be taken lightly. With that in mind, here are some questions that you should be prepared to ask your chosen tax professional to help establish their legitimacy:
- What is your background in tax?
- Can I see your PTIN (Preparer Tax Identification Number)?
- Are you up to date with state and local tax law requirements?
- What area of taxes do you specialize in?
- When will I receive a copy of my return?
- How do you calculate the fee that you charge?
- When will I receive my tax refund?
If you are concerned about any of the responses to the above questions, then you should seek further guidance and clarification.
Warning signals for non-legitimate tax professionals:
If your chosen tax preparer is anything other than legitimate, then you will doubtless be able to pick up on some signs and signals, such as the following:
- If they’re promising you an unusually high tax return
- When you pay them, is a percentage of that based upon the projected return figure?
- They can’t give you proof of their PTIN
Contact the Better Business Bureau if you have real concerns about a tax professional, and check their license status, too. Be sure to ask your tax preparer if they offer IRS e-file, which is one of the safest and most accurate ways to file as stated by the IRS. Perhaps most importantly of all, NEVER sign a blank return and do not engage with a tax preparer who asks you to do so.
How hiring a tax professional can save you money in the long term:
Oftentimes when using the services of a tax professional, because they know what they are looking for, they uncover missed deductions or credits and since their preparation fees are deductible too, engaging with one can end up saving you more money than you paid out. Granted, there are many self-filing tax software options on the market, but nothing beats the human eye and mind for spotting everything that you can deduct or credit to your tax forms.
So, if you’re looking too accurately and successfully file your taxes this year, your best bet would be to hire a tax professional who knows the ins and outs of the law and can maximize your deductions.