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With the tax preparation industry being worth almost $11 billion, you can guess that choosing tax preparation services might feel overwhelming — especially if you’ve never had to select a service before.
Whether you’re self-employed or not, though, hiring a tax preparer can be a huge relief when tax season rolls around, but how should you go about deciding whether or not a certain service is right for you? Luckily, we’re here to give you a few of the best tips.
Read on to learn 7 factors to consider for choosing a tax preparation service.
1. What’s Your Budget?
Before you start seeking out any services, the first thing you should do is create a budget. While prices are going to vary from preparer to preparer, it’s still important to know how much you have to spend.
The average cost for tax preparation is around $220, so keep that number in mind when you’re creating your budget. However, things like the preparer’s level of qualification, how organized you are, the state you live in, and how complicated your taxes are all play a role in what you’re going to shell out for tax prep.
Filing online vs. in-person might also have an impact on what you end up paying. If you’re interested in outsourcing online, however, you can check out this great resource: https://www.taxfyle.com/tax-preparation-outsourcing
2. Do They E-File?
You should ask every single preparer if they e-file. This is going to be the quickest, easiest way to ensure you get your refund. You should also ensure you have direct deposit set up with the IRS in advance.
They should also be able to tell you the necessary documents they’ll need to file your return, as well as things you’ll need for special schedules, forms, or other circumstances. While you should ask for this information well in advance (to give them time to get back to you), they should also be more than willing to give you this information.
If you find that they’re being difficult in giving you any part of the necessary information you need, it might be best to look for a different preparer.
3. Will They Provide a Signature?
The tax preparer’s signature along with their PTIN has to appear on your income tax return. It’s also a good idea to review your return before it’s actually filed to ensure accuracy.
If you’re not clear on something, you should ask plenty of questions to make sure you have everything right, and you definitely shouldn’t sign if you’re uncomfortable or don’t feel confident in any part of your return. Also, be sure to double-check the account and routing numbers that appear on your tax return form.
Once signed and filed, you should receive a copy of the completed tax return.
4. Ask For a PTIN
Like we already said, this number has to appear on any tax document that’s being filed. If your tax preparer is being paid for their services, they’re required to provide you with this number.
There’s also a database available filled with tax firms’ PTINs that you can search through. Here, you’ll be able to find a preparer’s skill level, expertise, and even the amount of experience they have. It’s a great way to get an idea about the preparers in your area, and it’s a great research tool to use.
5. What Happens if You Receive an Audit?
The next thing you should ask your preparer about is what happens if the IRS decides to perform an audit on your taxes. Some firms and preparers offer audit protection in the event of this happening, while others won’t.
If they offer the protection, you usually have to opt-in when you sign up for the service rather than when the audit hits, but it’s always smart to be prepared for the worst-case scenario. This option is especially helpful if you own a business.
6. Who Have They Prepared Taxes for in the Past?
Finally, a great thing to know about is who they’ve prepared taxes for in the past. If you’re a business owner or simply have complicated taxes, you want to ensure you’re seeing someone who can handle your taxes.
If you choose a preparer that’s never filed your type of taxes before, you might be at risk of them making a mistake. It’s all about who you trust with your finances, but if you need your taxes done a certain way then you should visit someone who understands.
7. Watch for Warning Signs
Here are a few warning signs to be on the lookout for:
- Signing a blank return
- Negative preparation history
- No PTIN
- Not allowing you to review when signing
These are just a few things to be on the lookout for, but there are other warning signs that might pop up on a case-by-case basis.
If you need to, you can always file a complaint about a tax return preparer with the IRS.
Remember These Tips When Choosing Tax Preparation Services
When it comes to choosing tax preparation services, there is a lot to take into consideration before getting started with any particular firm. You want to ensure they’ll have your back if anything goes wrong while staying within your budget and keeping your other considerations in mind.
Whether you’re a business owner who wants to outsource their taxes or you just don’t feel like self-filing this year, finding the right preparation service will be the perfect move for you.
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