|Is your tax preparer licensed? Don't put your business and personal tax returns in the hands of an un-licensed, un-verified tax preparer. All tax professionals must now be licensed by the IRS.
While millions of individuals prepare their own taxes – it really doesn't make economic sense for most. A good tax professional can usually save you more money than the fee they charge, save you hours of valuable time and provide you with peace of mind when the IRS sends you one of those scary notices. Tax laws are always changing and as a result it is very difficult for most individuals to be aware of all the deductions and credits they are entitled to. Online tax software is awesome but remember it is only as good as the individual using it. Every year people that had previously prepared their own returns realize they should have used a tax professional after receiving a notice of discrepancy from either the IRS or their state department of taxation.
When choosing a tax professional, don't put your business and personal tax returns in the hands of an un-licensed, un-verified tax preparer. Most people don't know that all tax professionals must now be licensed by the IRS. As of January 1, 2011, all paid tax preparers are required by law to obtain a PTIN (Preparer Tax Identification Number) from the IRS. Annual registration is mandatory. Prior to 2011 anyone could hang out a sign and call themselves a tax preparer.
Tax professionals are required to file all tax returns electronically. If your accountant is still filing returns manually – suggest to him or her that it is time to retire. Also please note that not every CPA or lawyer is a registered tax professional. Don't subject your federal tax returns to scrutiny by the IRS by using an unqualified tax preparer. Ensure that your tax professional is properly registered. Use PTINdirectory.com to find a licensed tax preparer to prepare your taxes or verify that your current tax professional is compliant and has been issued a PTIN number.
Lastly, when choosing a tax preparer, please don't judge the quality of a tax preparer by the size of your refund. A refund for most taxpayers is a return of his or her own money that was withheld during the year at one's job. If you pay in extra money during the year, your refund will be larger. People often ask why their refund is substantially smaller than their neighbors' who boasted to them their accountant got them so much money back. If you had nothing withheld during the year, unless you qualify for a refundable credit such as the earned income credit or education credit, don't expect to receive a refund. Tax professionals are not magicians. Don't expect them to break out the magic pen!