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Is It Finally Time To Have A Tax Preparer Prepare Your Tax Returns?

Wednesday, February 5th, 2014

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

For several years now the key provisions of many of the Federal income tax laws are continuously being changed each year.  Some of the changes are minor, others are not.  It is reasonable to expect that more annual tax law changes will be forthcoming for the remainder of this decade as the Federal government attempts to reduce the trillion-dollar budget deficit by increasing tax revenues.  You can also expect that the complexity of the income tax laws will be concurrently changed.  Most tax practitioners share the view that the current Federal administration is focused on increasing the taxes for those taxpayers who are in the higher income tax brackets, especially if your combined annual family income, from all sources, is above $200,000.00/year.  It is possible for this income threshhold to be lowered in the future. 

Tax preparers are required by both Federal and State regulations to continuously stay abreast of most tax law changes, but they must also be knowledgeable of all the tax law changes that will affect their tax clients.  While a tax preparer can prepare your tax returns for you, a tax practitioner can can also analyze your current tax situation and then provide you with options and recommendations to reduce your annual tax liability.

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Now Is The Best Time To Begin Preparing Your 2013 Tax Return

Wednesday, April 24th, 2013

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice.

This is the best time of the year to start preparing for your 2013 tax return.  The new 2013 tax laws have already been signed in to law, you already know which  problems that you had in preparing your 2012 tax return, and by starting now you can avoid going through the same agony in 2014.  You should also avoid using the Scarlett O’Hara approach from “Gone With The Wind” – “Tomorrow’s another day!”   You could also think about the old adage – “Bad medicine is best when taken in small doses!”

The United States uses a pay-as-you-go approach for your annual tax liability.  You are expected to have on deposit with the U.S. Treasury one fourth of your annual income tax liability each quarter.  This requirement can be fulfilled using several methods such as payroll withholding, quarterly estimated tax payments, backup withholding etc. 

Organizing your records throughout the year is always important.  Having your tax return records easily accessible after December 31st will diminish your stress and reduce the time required to assemble these important documents.

Perhaps this is the time to begin using a tax professional to assist you in the preparation of your tax returns and to advise you regarding opportunities to reduce your tax liability.  The U.S. Congress has succeeded in passing income tax laws that are more difficult to comprehend and require an extensive degree of technical knowledge.  You should ask the tax preparer for an estimate of the cost for the preparation of your 2012 tax return.  Then divide the estimated cost by the total actual number of  hours which you spent accumulating records, extracting data, and preparing your tax return.    What was your conclusion?

If you will be changing your marital status in 2013, contact a CPA or tax attorney as soon as possible.  The Internal Revenue Service tests your marital (filing) status as of December 31st every year.  This is especially important if you plan to be divorced, marry, or separate.  Your final divorce decree or separation agreement does not supersede the provisions of the income tax laws!  If you are living in a “community property state” this task is even more important.  Additional information can be obtained from IRS Publication 504 (“Divorced or Separated Individuals”) or using this link:  http://www.irs.gov/publications/p504/index.html  (more…)

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Should You Contact A Tax Preparer This Year???

Wednesday, February 6th, 2013

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

The key provisions for many (if not most) of the tax laws have now changed, and more changes will be forthcoming during the remainder of this decade as the Federal government attemps to reduce the trillion-dollar budget deficit by increasing tax revenues.  You should also anticipate the fact that the complexity of the income tax laws will also concurrently change.  A tax preparer can certainly assist you with the preparation of all of your tax returns.  However, he or she can also analyze your current tax situation and then provide you with options and recommendations to reduce your annual tax liability. 

Ten Tips to Help You Choose a Tax Preparer

 

Many people look for help from professionals when it’s time to file their tax return. If you use a paid tax preparer to file your federal income tax return this year, the IRS urges you to choose that preparer carefully. Even if someone else prepares your return, you are legally responsible for what is on it.

Here are ten tips to keep in mind when choosing a tax return preparer:

1.   Check the preparer’s qualifications.  All paid tax return preparers are required to have a Preparer Tax Identification Number. In addition to making sure they have a PTIN, ask if the preparer belongs to a professional organization and attends continuing education classes. 

2.   Check on the preparer’s history.  Check with the Better Business Bureau to see if the preparer has a questionable history. Also check for any disciplinary actions and for the status of their licenses. For certified public accountants, check with the state boards of accountancy. For attorneys, check with the state bar associations. For enrolled agents, check with the IRS Office of Enrollment.

3.   Ask about 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 can. Also, always make sure any refund due is sent to you or deposited into an account in your name. Taxpayers should not deposit their refund into a preparer’s bank account.

4.   Ask to e-file your return.  Make sure your preparer offers IRS e-file. Any paid preparer who prepares and files more than 10 returns for clients must file the returns electronically, unless the client opts to file a paper return. IRS has safely and securely processed more than one billion individual tax returns since the debut of electronic filing in 1990.

5.   Make sure the preparer is accessible.  Make sure you will be able to contact the tax preparer after you file your return, even after the April 15 due date. This may be helpful in the event questions arise about your tax return.

6.   Provide records and receipts.  Reputable preparers will request to see your records and receipts. They will ask you questions to determine your total income and your qualifications for deductions, credits and other items. Do not use a preparer who is willing to e-file your return by using your last pay stub before you receive your Form W-2. This is against IRS e-file rules.

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

8.   Review the entire return before signing.  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.

9.   Make sure the preparer signs and includes their PTIN.  A paid preparer must sign the return and include their PTIN as required by law. The preparer must also give you a copy of the return.

10.   Report abusive tax preparers to the IRS. You can report abusive tax preparers and suspected tax fraud to the IRS on Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or altered a return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. Download the forms on the IRS.gov website or order them by mail at 800-TAX-FORM (800-829-3676).  

Additional IRS Resources:

 

 

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