How to Choose a Tax Professional

Your taxes are very important, and they’re something you don’t want to screw up. If you don’t feel comfortable doing them yourself, you’ll want to hire a tax professional to do them for you. Hiring someone to do your taxes can be costly, but it can also save you lots of time and headaches, and it can help you maximize your return. It’s incredibly important to hire someone who is both trustworthy and knowledgeable. Here are some tips on how to choose a tax professional.

Types of Professionals
There are two types of tax professionals that are usually best: enrolled agents (EA) and certified public accountants (CPA). Enrolled agents are licensed by the IRS, and they’re required to constantly continue their tax education. Certified public accountants are licensed through state exams and have met education requirements. It’s a good idea to go with either an enrolled agent or a certified public accountant. These tax professionals will be listed with either the American Institute of Certified Public Accountants (AICPA) or the National Association of Enrolled Agents (NAEA).

Tax Preparation Chains
There are also lots of tax preparation chain offices that can help you prepare your returns, such as H&R Block and Jackson Hewitt. While they may be much cheaper than hiring an EA or CPA, you get what you pay for. Tax chains often use seasonal employees that have been quickly trained. They’re just not as reliable as other trustworthy professionals. If you have a very simple return, you might consider getting it prepared by a chain. However, remember that you’re ultimately responsible for your own return.

Check out the AICPA or NAEA for directories of tax professionals near you. Or, ask around for referrals from your trusted friends, family, and co-workers. Lots of people you know may have someone they’ve been using for years that they’ll be happy to suggest to you. Whenever you get a referral, be sure to still ask important questions and check on their certifications and qualifications.

Background Checking
You’ll want to thoroughly check out any tax professional before you hire them. Your money and your taxes are incredibly important to you, so you want to take care when entrusting anyone else with them. You can perform a background check, and check with the Better Business Bureau to make sure your professional has never been accused of fraud or anything criminal. Ask them for their Preparer Tax Identification Number, and check their certifications with either the AICPA or NAEA. Finally, ask them for some references and follow through with contacting them.

You want to make sure a tax professional is compatible with your own personality. Do you feel comfortable with that person doing your taxes? Also, find out how they run their business, such as how and when they can be reached, and what services they perform. Hiring a CPA or EA may be costly, so make sure you know exactly how you’ll be charged. Ask them what happens if your tax return ends up being audited, because you’ll want someone who will represent you. Most importantly, make sure your tax professional is experienced with the type of taxes you need prepared, and find someone who will work with you to find the best outcome for you.

K. Villareal is a personal financial counselor. To make sure her clients understand her advice, she always uses a grammar checker.

Avoiding And Reporting Tax Scams

How to Avoid the “Dirty Dozen” Tax Scams

In the past few years, the IRS has seen a considerable rise in identity theft and refund fraud, as scammers attempt to get your personal information in a fraudulent email, where they claim to be someone from the IRS or the makers of TurboTax Software. In the email, they claim that they need a greater amount of personal information, which according to the Better Business Bureau is a red flag.

People should not answer these sorts of emails, call any phone numbers listed or click on any links provided in the letter. The email can lead you to a fake website that can harm your computer. Taxpayers who are involved in tax scams such as these are liable for any tax due as well as statutory interest.

Here are the “Dirty Dozen” tax scams that people should be careful to avoid:

1.    Identity theft and phishing
2.    Hidden offshore income
3.    Return preparer fraud
4.    Filing false or misleading forms
5.    Frivolous arguments
6.    False nontaxable social security benefits reports
7.    Abuse of charitable deductions
8.    Abuse of retirement plans
9.    Disguised corporate ownership
10.    Filing a false wage amount
11.    Misuse of trusts
12.    Fuel tax credit fraud

You should remember that if something sounds too good to be true it might just be a fraud. If you know of a tax scam you should report it to the IRS. You can report suspected tax fraud by filling out Form 3949-A, mailing the IRS a letter or calling 1-800-829-3676. As a whistleblower, you may be eligible for a reward.