3 Questions to Ask Your Tax Preparer Before You Sign Your Return
Every year about this time, tax season rolls around and the filing frenzy begins. Although the tax forms come with instructions and the government sponsors many free online programs to help you file your claim yourself, tax preparation companies like H&R Block, Jackson Hewitt and Liberty Tax do a lot of business this time of year. In fact, just about anyone can prepare your tax return for you. Be smart about your taxes, though. Make sure you’re getting a qualified preparer and a legitimate return by asking some smart questions.
What’s your tax preparer ID number? Starting January 1, 2011, it was decided that all paid tax preparers must have a Preparer Tax Identification Number (PTIN) issued by the IRS and renewed each year. Each preparer must prove his competency and take continuing education classes to renew the PTIN each year. This helps the IRS keep tabs on possible scammers and incompetent preparers. If your preparer doesn’t have a PTIN, he’s not legitimate and you should take your returns elsewhere.
What exact deductions and credits did you put on my return? The whole reason you have someone prepare your taxes is to get as many deductions and credits as possible. You’re hoping that your tax bill will be lower or your tax refund will be higher than what you would have come out with on your own. But, if your preparer is adding on bogus claims on your return, you’re the one in hot water with the IRS–not him. So before you sign the dotted line, make sure you understand every single one of your deductions or credits.
What’s your policy on audits? It doesn’t matter who prepared your taxes. You are responsible for what the forms say. So in the event of a tax audit, you have to defend that return to the IRS. Some tax preparation companies offer to help you with an audit but most of them don’t, so know upfront what the policy is so you can either find a new preparer, or be aware of what could happen with an audit.
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