It is important for all business entities as well as individuals to pay tax on their respective incomes. Filing of tax returns is a legal responsibility for every entity with a taxable income. There seems to be an unending strife between the state and the persons earning income. While the will of the state is to extract as much revenue as taxes from these entities, the businesses are always looking for loopholes in tax laws to avoid paying tax.
This increases our dependence on tax experts and professionals. A one-third of businesses and individuals rely on trained tax advisors to prepare tax returns for them. Despite being massively in demand, many of us have no clue as to how to hire the best tax advisor. It can be estimated from the following figures.
A whopping 80% of the people who hired tax advisor never knew about their credentials and reliability. The 75% of the employers of tax advisors never bothered to ask them if the advisors will be representing them or their business in a tax audit. This level of negligence is downright crazy, especially so due to the fact that a business is sharing some of the most sensitive information with their tax expert. Be it your bank account, marriage, kids, or social security number, there’s hardly a tax consultant is not aware of.
Here are some useful guidelines to hire reliable and expert professionals who will give you solid and lawful end-of-year tax planning tips, saving you thousands of dollars.
Ask For The Tax Planner’s Identification Number
The first step in picking a good tax preparer is to ensure that they are properly registered and competent. To see that, ask them for their identification number.
The IRS has a requirement for all federal tax return preparers for compensation to have a special PTIN. Note the emphasis on the phrase ‘for compensation’-meaning that volunteer preparers don’t have to have PTINs. If you are working with a proper tax advisor or planner, it is mandatory for you to see whether he or she puts their PTIN number on the return because this is the requirement of the IRS.
Hire Someone With Proper Accreditation And Qualification
Despite being important, a PTIN number can be acquired easily. So, relying on it exclusively won’t be a good idea. You should go a step ahead and seek the services of a more credentialed tax advisor. It could be a CPA, an attorney with license, an enrolled agent or someone who has successfully undertaken and completed the IRS’ annual filing season program.
There are different programs like accredited business accountant and accredited tax preparer which help the preparers to live up to the annual filing season program requirements. These credentials matter because they all require varying amounts of exams, study and education. A preparer that has these qualification is rightly competent enough to prepare the tax returns for you. An important question that arises here is that how can you find a reliable and expert tax preparer near you with efficient credentials?
Exploring the IRS’ directory is one way to do it. The directory contains information about the preparers with PTINs as well as IRS-recognized professional qualifications and credentials. In this database, there are no volunteer preparer who only have PTINs.
Find Friends In Important Places
There are different professional associations and organizations such as National Association of Tax Professionals, and the National Association Of Enrolled Agents that work with only the qualified and certified preparers. It might be important for you to build connections there. These associations have proper ethics and code of conducts.
Having friends or good connections in these places will help you when you are looking for someone competent to entrust them with your end of year tax planning.
Compare Service Charges
If you are in the process of consulting multiple tax preparers, it would be to compare their fees. Since you are going to pay them for their services, knowing the cost in advance can contribute towards making a better decision. As per the National Society Of Accountants, the average fee for making a tax return would be $294 which includes an itemized form 1040 with schedule A. The average expense to prepare a form 1040 WITHOUT itemized deductions will be $188.
All trustworthy tax preparers often tend to charge by hour. In case you come across someone whose fee depends on your refund size, avoiding them is the best option. The prices of the tax preparer’s services can go even higher than $150 an hour if the IRS is auditing you in person.
Look At The Preparer’s Focus on E-Filing
The electronic or e-filing of tax returns becomes mandatory for any preparer who files more than 10 returns for clients. It is the rule imposed by the IRS. If the preparer doesn’t use the IRS’ e-file system, be cautioned. A preparer that does not offer e-file is a clear indication that they have not been spending their fair share of time in tax preparation.
They Should Be Willing To Sign The Dotted Line
Signing the clients’ returns and providing their PTINs is the legal requirement for the paid preparers. You should take great care and must never sign a blank return as it gives the preparer and opportunity to write anything on the return. They may even put their own bank account which will rob you of your refund.
Hiring accountants in Bromley is indispensable for the filing of your tax returns in a lawful and timely manner. The experts have adequate competence, knowledge, and experience. This puts them at sharp advantage over amateurs and non-experts.
As a business owner or an individual, it is imperative that you take great care on your end while picking a tax preparer for your business. Ending up with a wrong professional may also land you in a legal battle with tax-extracting agencies. To avoid such embarrassment, make sure you are hiring the most competent person for the job.