You may think all tax preparers are created equal. That would be a dangerous assumption to make. There are dishonest tax preparers out there, and if your highly sensitive information gets into their hands, it could spell real trouble for you. Dishonest tax preparers could commit tax fraud in their clients’ names as well as steal their clients’ tax refunds.
Nonetheless, an honest tax preparer can be a great asset in removing your headache and simplifying your tax return process. To maximize your chances of having a positive tax preparation experience, it’s important to understand what to look for when choosing whom to entrust with your tax information.
- Check for the PTIN. First and foremost, you need to make sure the person you’re dealing with is an authorized tax preparer. Any legitimate tax preparer is required to have a Preparer Tax Identification Number (PTIN). Ask for this information from the onset.
- Be on the alert for anything that seems fishy. Has your tax preparer asked you to sign a blank tax form? Take a minute to ask yourself why this course of action would make any sense. (Answer: it doesn’t. You should never sign an incomplete tax form.) Has your tax preparer claimed that he can get you a higher refund than his competitors? Has he guaranteed you a certain refund before even looking your information over? These are all red flags.
- Ask how fees are calculated. While not all tax preparers follow the same method of calculating charges for tax preparation services, there are some common approaches that many follow. They might charge a fixed fee for each tax form your case requires, or they might charge an hourly rate for the total amount of time it took to prepare your return. They might include additional charges if the information you provide is incomplete or disorganized. What they should not do, however, is take a percentage of your refund as payment.
In this era of increased fraud and identity theft, it is important to be informed and proactive about finding a tax preparer who is trustworthy.