Tips for Finding a Qualified Tax Preparation Professional

If you have had any level of financial success, you have probably considered hiring a qualified tax preparer. Hiring a qualified tax preparer with good references and solid credentials has become increasingly important over the last several years, in part because of the growing number of people who pose online as tax experts. In fact, approximately 80% of people who have used a tax preparer in the past have admitted that they have never asked their tax preparer for his or her credentials.

Because of this, we have created a list of tips to help you weed out the good from the bad.

Ask Preparer for His or Her Tax ID Number

Believe it or not anyone who prepares taxes for the IRS is required by law to have a Preparer Identification Number, unless you are a volunteer. If you’re paying someone to prepare your taxes asks for their PTIN this not only protects you but it will insure you that the person who’s preparing your taxes has the legal documentation to be doing so.

Work Exclusively with CPAs

While some people may settle for just someone who has a PTIN, you may be one of those people who needs to take it a step further by only hiring a CPA. This designation shows that the person is both qualified and capable of performing essential accounting tasks.

Seek Out Professional Organizations

Professional organizations are a great way for you to identify qualified tax preparers. Examples of such organizations include the National Association of Tax Professionals and the Academy of Attorney CPAs.  The professionals in these organizations are generally not only credentialed but also are required to abide by a certain set of ethics and rules.

Ask Them to Sign on the Dotted Line

This may sound like a weird question to ask, but keep in mind that if you are paying your preparer the law requires that they sign your returns and put down their PTINs. If for some reason your preparer refuses to give you either of those pieces of information, run. They may be looking to only prepare your taxes so that they can steal your refund.

Make Sure You Trust Them

If you hire a tax preparer, you will want to make sure you trust them. Of course, you want to trust them for the obvious reasons; however, you will also want to make sure that you trust this individual to represent you in case you are later audited by the IRS.

What issues have you ran into when hiring a tax preparer? Leave your comments below.

Image credit: John Morgan

Four Tax Mistakes Your CPA Can Help You Avoid

Tax season is upon us, and whether you know it or not, you could be causing yourself unnecessary harm by making mistakes on your tax forms. No matter how diligent you may be, there is a good chance that, if you go solo, you will make at least one or two common mistakes. Below are just a few tax miscalculations your CPA can help you avoid on your tax form:

Direct Deposit Dangers

Direct deposits are a great way for those who are expecting a refund to get their refunds much quicker and easier. While direct deposit may allow you to receive your refund faster, it also increases the odds of making mistakes when you input your account number. One wrong number could cause your refund that you worked so hard for to suddenly go to someone else.

Filing Additional Income

Have a side job? Don’t forget to file that additional income even if you’re a contractor or freelancer. Refusing to file additional income could cause you to receive tax penalties.

Missing Signature

Believe it or not, something as simple as a signature could keep you from filing your taxes in a hassle free fashion. Make sure that the moment you file your taxes, you include your signature to ensure your taxes are properly processed.

Incomplete Charitable Deductions

Have you been making charitable deductions? Have you also been keeping records of those deductions? Incomplete charitable deductions could cause you a nightmare during tax season.

In addition to the above tax mistakes, there are still several ways your accountant can help you file your return more smoothly. Though mistakes are common, you don’t want to be one of those people who loses thousands of dollars because of several mistakes that could have easily been avoided.

What other ways has your accountant helped your company avoid tax mistakes? Leave your comments below.

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Four Items to Bring to Your Tax Preparation Meeting

It’s tax season, and if this is your first time utilizing a CPA to prepare your taxes, you want to be sure you are adequately prepared prior to your first meeting with your accountant. Most CPAs generally charge for their services by the hour, and the more time you waste attempting to prepare items on the spot, the less time your CPA has to help you.  While each tax situation is unique, many CPAs suggest that you come with a few particular items in order to ensure that your meeting is maximally effective and efficient.

Pen and Notebook

Be prepared to take notes. If this your first time meeting with your CPA, you are going to want to make sure that you listen very carefully and take note of everything that is said to ensure that you are prepared during your next meeting with them.

Employment Forms

If you have W-2, 1099 or any other employment verification forms, please bring them along with you to your first meeting. This is vitally important because your accountant will need to input this information into his or her computer system in order to determine what your tax refund is or if you owe any money.

Charitable Donations

Are you a giver? Do you give money to local charities or to your local church? Make sure you bring documentation with you to substantiate this giving during your first meeting with your CPA. While you may have given in good spirit, charitable donations are actually tax deductions which could save you from a plethora of tax penalties.

Dependent Care

Do you take care your own, or perhaps someone else’s, children? Do you have a parent that lives with you? If you take care of anyone else’s expenses, then make sure you bring all bills and documents associated with such expenses. Taking care of these expenses could land you additional tax credits or put you in a position to file as head of household.

Have you met with your CPA recently to go over your tax information? What forms were you asked to bring? Leave your comments below.

Image credit: Leslie Richards