8 Tips For Picking The Right Tax Preparer

You know that I love you all and would just love to prepare every last one of your 1040s this year. But between my existing clients and that centipede I can’t seem to catch, I’m booked solid through tax day.

Thank heaven the IRS has the following tips for when it comes time to pick a tax preparer:

1. Check the person’s qualifications. Ask if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.New regulations require all paid tax return preparers including attorneys, CPAs and enrolled agents to apply for a Preparer Tax Identification Number — even if they already have one — before preparing any federal tax returns in 2011.

2. Check on the preparer’s history. Check to see if the preparer has a questionable history with the Better Business Bureau and check for any disciplinary actions and licensure status through the state boards of accountancy for certified public accountants; the state bar associations for attorneys; and the IRS Office of Professional Responsibility for enrolled agents. (You can e-mail opr@irs.gov — be sure to include the preparer’s name and address.)

3. Find out about their service fees. Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers.

4. Make sure the tax preparer is accessible. Make sure you will be able to contact the tax preparer after the return has been filed, even after the April due date, in case questions arise.

5. Provide all records and receipts needed to prepare your return. Most reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items.

6. Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.

7. Review the entire return before signing it. Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.

8. Make sure the preparer signs the form and includes their PTIN. A paid preparer must sign the return and include their PTIN as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return.The preparer must also give you a copy of the return.

Remember: You’re still legally responsible for the content of your tax return, whether you prepare it yourself or hire a paid preparer. So if you think the results of your return seem too good to be true, it behooves you to double and triple check everything before signing off on it.

Points to Keep in Mind When Choosing A Tax Preparer [IRS]


Edit Your Comment

  1. obits3 says:

    6. Never sign a blank return

    LOL: 6.5 Read what you are signing before you sign it!

  2. Cheap Sniveler: Sponsored by JustAnswer.comâ„¢ says:

    7. Never use H&R Block or Jackson Hewitt.

    • Loias supports harsher punishments against corporations says:

      That falls under the percentage of your return rule don’t it?

    • MamaBug says:

      for real. that’s how my ex-husband got EIC/deductions for a daughter that was neither his biologically nor ever fiscally responsible for her. File together one year, next year he goes in and just told them we’re divorced and he has custody – *bam* he gets money.

      • hotdogsunrise says:

        You’re not the only one. I saw this quite frequently when I worked at a tax clinic.

        • jessjj347 says:

          Yeah, and most people don’t realize that they can still claim their dependent even if someone else illegally did.

      • alana0j says:

        I’m a receptionist for H&R Block, I can tell you that unfortunately the tax pros go by what they’re told, that’s just how it is. If he told them he had custody they can’t call him a liar, only input what information they are given.

  3. segfault, registered cat offender says:

    9. Be sure Tax Cat is declawed before giving him a bath.

    • Mr. Fix-It says: "Canadian Bacon is best bacon!" says:

      Nah all you need is kitty soap and a toilet with a sturdy lid ;P

      Apply soap to toilet-water. Apply kitty to toilet. Apply butt to toilet lid. Allow kitty to self-agitate for a minute or two. Flush repeatedly to rinse kitty. Remove butt from lid and stand back.

      • Cheap Sniveler: Sponsored by JustAnswer.comâ„¢ says:

        Meh. I prefer the front loader. Spin dry is awesome!

        • Mr. Fix-It says: "Canadian Bacon is best bacon!" says:

          Never thought of that; too bad my front-loader doesn’t have a ‘kitty’ cycle. Set it to ‘delicates’, maybe?

          • Necoras says:

            I turned my dryer on with my cat in it for about 1 second once. He has never gotten into the dryer ever again.

          • Cheap Sniveler: Sponsored by JustAnswer.comâ„¢ says:

            Since implementing “Squirrel on a Slinky” cam and the “Tax Cat in the Front Loader” channel, I’ve been able to drop Comcast and save $78.96 a month. Now, THAT’s Comtastic!!

      • DarthCoven says:

        you owe me a keyboard

    • webweazel says:

      I like the one;
      *Washing a cat is like washing a running chainsaw.*
      ‘Bout sums it up.

  4. PanCake BuTT says:

    Can Tax Kitty do them for me this year ? He looks, intelligent & thorough enough.

  5. TooManyHobbies says:

    IMO, if you’re getting a refund, you need to adjust your withholdings. It means that you’re giving the government an interest-free loan. I try to get my taxes with $100 one way or the other of zero.

    You don’t want to owe too much on April 15, because then you can be open to underpayment penalties and may even be required to file quarterly estimates in the future, but owing $500 or so is a GOOD thing. It means you didn’t give the government that $500 earlier.

    People think a refund is some kind of free bonus. It’s not. It means you paid more than you should have, and the government is just giving it back.

    • Feezybeezy says:

      Agreed. Right now, my tax payment during tax season is on the order of $2000. I need to readjust my withholding to make sure that I get my tax payment lower.

      Although, I do like the idea that I am using the government’s money and earning interest on it before returning it to them.

      • You Can Call Me Al(isa) says:

        Rather, view it as your money that you’re earning interest on before giving it to the government in return for its services.

    • Necoras says:

      This can be difficult to do. I switched jobs last year and the w4 worksheet told me to basically ignore all of my exemptions/deductions because of it. Because of that it calculated out that I owed several hundred dollars every paycheck. The end result is that I should be getting a HUGE refund this year.

      But you’re correct; if your situation has been stable for a few years and you know roughly what everything’s going to add up to, then adjust your withholding accordingly.

    • johnva says:

      The one exception to this is that some people receive huge refundable tax credits that end up meaning the government owes them money at the end, vs. them paying any income taxes. You can’t drop your withholding below the legal limits.

      But yes, for the most part that’s correct. Although as mentioned, it can sometimes be rather hard to figure out how to set your withholding up properly if you have a complex situation (e.g., multiple jobs, significant capital gains/dividend/interest income, unpredictable income from being a self-employed contractor, etc). You basically have to predict what your tax liability will be, and that’s not always possible to do.

    • Nigerian prince looking for business partner says:

      I usually try to owe around $100 or $200 to the IRS at the end of the year but it can be incredibly difficult to do so when certain deductions are difficult to predict.

    • Peter Nincompoop says:

      The IRS has a handy withholding calculator available on their website that asks a series of questions before recommending you adjust the amount of withholdings you claim on your federal taxes.


      My Federal refund reduced from almost $1000 in 2009 to $29 in 2010 thanks to its recommendation that I adjust from a “1” to a “2”.

  6. mac-phisto says:

    i think it’s also important to know what kind of guarantee against inaccuracies exists. some preparers will “insure” a return; others will not. even if this “insurance” exists, bear in mind that preparers will almost always just pay the penalties associated with an incorrect return – you will most likely still be on the hook for paying the money due to the IRS.

  7. Robofish says:

    Anyone have any thoughts on Turbotax?

    • Bsamm09 says:

      It’s good BUT garbage in, garbage out. If your return is simple, use it.

    • unsmith says:

      I’ve used Turbotax for years and swear by it.

    • Nigerian prince looking for business partner says:

      I use Turbotax but still opt to pay a CPA to do my taxes every ~ 5 years to help me identify new (and obscure) deductions.

    • Jevia says:

      I used to do my own taxes, then started using Turbo Tax a couple of years ago. It sure saves me a lot of time and paperwork, I don’t have to worry about getting the right forms and such. You still have to be organized, have all your receipts and such, but it saves on doing the calculations.

      Can’t say how good it is for business or if you have income other than ‘ordinary wages’, but it works pretty well for a ‘simple’ 1040 return with kids, some non-compensated work expenses and other itemized deductions.

    • Cheap Sniveler: Sponsored by JustAnswer.comâ„¢ says:

      Tax Act works fine for me, 6 years and counting, It’s free to use and it’s a free Efile for everyone regardless of income.

  8. Robofish says:

    Anyone have any thoughts on Turbotax?

  9. Robofish says:

    Anyone have any thoughts on Turbotax?

  10. pandroid says:

    Also, if you’re a low income household, check out the IRS VITA program, which provides free tax return preparation: http://www.irs.gov/individuals/article/0,,id=219171,00.html

  11. borgia says:

    Knowing some of the people who work for new mexico tax and revenue (new mexico has a state income tax). I know they hate some of the larger firms for the errors they make and lies they tell their clients. So don’t trust a company name just because it is well known.

  12. bkeyport says:

    Problem here, Consumerist…. As a professional tax preparer, I agree with most of your comments… however, The IRS has us use a PTIN now, yes, but this year, it is NOTHING but a registration list. There is no background checking, no qualifications, no testing, nothing. That’s not scheduled to phase in until at least 2014 – and my professional org is saying that it is rumored to be delayed yet again, due to problems with the basic registration system.

    I remind consumers of one major thing – CPAs know accounting, Tax Attorneys know the law, tax professionals know how to do taxes. In most states, CPAs have no professional requirement to take continuing education on taxes. Tax Attorneys get a free pass, simply for being an attorney – they have no tax study requirement by the bar even to become a Tax Attorney.

    Here’s another fact – I’ve taken courses from the chain tax companies, and I still use them as a refresher course. The class breakdown here is typically – Top 30% of the class works for someone else, next 20% will be working for someone else, next 20% take it for kicks, and the rest are the folks that work for the chain. That SCARES me – although I like that a good 40% of my business is correcting mistakes from the chains and online.

  13. Anonymously says:

    Learn to do it yourself. Take a tax course if you’re not unsure..

  14. ngoandy says:

    My number one piece of advice is to not have an acquaintance do it.

    My girlfriend’s family had a guy from their church handle their taxes. One of her relatives taught English abroad. The guy was making the relative pay local, state, and federal taxes for the income, even though it was far below the IRS threshold. He fed them a line of shit that the person would lose their status as a US citizen otherwise.

    • Bsamm09 says:

      Referrals are the best way to find a good accountant, IMO. If it just some guy who happens to do taxes every year, that’s a different story.

  15. The Financialite says:

    I agree with bkeyport and his comments – please make sure that you look into someone’s qualifications before you allow them to look at your tax documents. As a tax preparer, it amazes me that a lot of my peers who are auditors, accountants and/or CPAs do not possess the tax knowledge that is needed to prepare taxes. You should look for someone – even a smaller tax professional in your home town – who is knowledgeable and has time to take you on as a client. I would also agree with Cheap Sniveler and never use H&R Block or another chain because the majority of these preparers are reading from a screen and unable to answer questions further than what is in front of them! I know everyone is trying to save a buck, but when you get an IRS notice you will end up paying more for their mistakes!

    Happy Tax Season!!

  16. HogwartsProfessor says:

    Thanks, TaxCat. I need help with mine this year, since I’ve had freelance income coming in. I’ll probably get the bf to help me since he’s the gubmint man. As an added incentive, I can pay him in cookies and bacon.

  17. Bsamm09 says:

    “As a tax preparer, it amazes me that a lot of my peers who are auditors, accountants and/or CPAs do not possess the tax knowledge that is needed to prepare taxes.”

    Anyone can call themselves a tax preparer, but you have to earn the CPA designation. It wouldn’t amaze an accountant that a CPA who does audits couldn’t do their own taxes. Two different fields of accounting.

  18. gerald.saul says:

    When I ran into some tax troubles last year I used Dave Ramsey’s Endorsed Local Provider service to find an accountant. He’s been great in handling all my issues and I found out after the fact that a good friend of mine has used him for years. He’ll be getting my phone call here in about a week or so…

  19. Peter Nincompoop says:

    TurboTax e-file service is cheaper than H&R Block’s e-file service when filing a state return by about $12, but it’s not as simplistic as H&R Block’s interface. I have to pay regional income tax in Ohio (RITA) and figuring out what I’d owe RITA using TurboTax was a bit confusing and required doing my own math to fill-in the blanks on this section. I used H&RB e-file last year and didn’t come across this issue, as it filled-in the blanks for me.

    • xredgambit says:

      Just use ohio’s site, it’s free and easy. RITA’s site is easyish to use, if you move just be prepaired to fudge numbers so the city doesn’t try to take everything you make, only what you made living there. But I think they fixed that this year with an “out of city” deduction.