While taxes may seem difficult, you don’t want just anybody who advertises tax filing to prepare your return. Unfortunately, the tax preparation industry isn’t regulated, and some tax businesses are run by untrained or dishonest people.
You may be tempted to go to businesses that are known to generate large tax refunds. However, be careful and make sure that the tax return is prepared accurately. Ultimately, you (as the tax filer) are held responsible if there are errors associated with the return.
Luckily, there are steps you can take to ensure that your tax return is accurately prepared by a trained and experienced tax preparer.
1. Decide if you need a paid tax preparer.
Before looking for a tax preparer, decide if free tax filing options could work for you.
If you (and your spouse if filing jointly) earn less than $60,000, you could qualify for free tax preparation in your community. VITA and Tax-Aide sites offer free and reliable tax filing services. They prioritize accuracy, with a rate of over 90 percent, the highest in the industry. To find a site, visit the IRS’ site locator tool.
If you have a basic tax return, there are free options to file online. GetYourRefund.org provides virtual assistance with IRS-certified volunteers for people with income under $66,000. If you have income under $79,000, you can also file your own taxes through this site. There is no income limit to file your own taxes through MyFreeTaxes. If these sites don’t meet your needs, there are many tax filing software options that are more affordable than visiting a paid tax preparer.
The IRS will pilot a new tax filing tool during the 2024 tax season. Direct File will allow eligible taxpayers in 12 states to electronically file their 2023 federal tax return directly to the IRS for free. The mobile-friendly tool will be available in English and Spanish starting in early March 2024.
2. Check the preparer’s qualifications.
Unfortunately, there are no regulations for paid tax preparers, so you need to do your own research and take precautions. Make sure your tax preparer has a Preparer Tax Identification Number (PTIN). A PTIN is required for tax preparers who charge for their services and indicates that the preparer has registered with the IRS. The IRS has a directory where you can verify PTINs and credentials.
Ask about their training. At the minimum, make sure that they have passed a state or federal tax certification exam. The IRS has a guide to understanding tax preparer credentials and qualifications that can help you in finding the right preparer.
3. Ask for a price quote BEFORE agreeing to an appointment.
Some tax preparers will try to delay telling you a price until after they’ve completed the tax return. To simplify the process, have last year’s tax return handy (if available) so they know what forms will be involved. Get the name and title of the person providing the quote.
After scheduling an appointment, if someone subtracts portion of your refund that you don’t believe is accurate, ask for an explanation of all charges. If the preparer refuses to provide one, or what they share is unsatisfactory, gather your documents and leave.
4. Choose a tax preparer who can be contacted later.
If the IRS has questions about the tax return, make sure there is someone to contact for follow-up. Check out the preparer’s reputation with others in the community and get the preparer’s address and telephone number.
5. Do not leave original documents with the tax preparer.
If the tax preparer needs to work on your return when you are not present, make sure they have scanned or copied the necessary information. Always take your original documents with you.
6. Insist that the commercial tax preparer sign the tax return in pen.
This is required by federal law. The preparer’s address and Preparer Tax Identification Number (PTIN) are also required on the tax return.
7. Request a complete copy of the tax return and do not sign a blank return or sign in pencil.
Check to make sure names, addresses, Social Security numbers and wage information are entered correctly.
8. Review the return with the preparer to understand the reason for any refund or reduction in the amount of taxes owed.
Even though your preparer does the return and signs it, you are responsible for the accuracy of all items on the tax return.