Approximately 60 percent of Americans enlist the help of a paid tax professional to file their income tax returns according to the IRS. With the 2013 tax season underway and the IRS accepting returns on January 30, even more consumers may turn to a tax preparer this year to determine how significant tax law changes (including the American Taxpayer Relief Act of 2012) impact their individual tax situation.
With the sweeping last-minute tax law changes, even taxpayers who have filed their own returns in past years with do-it-yourself software should think twice this time around. Many taxpayers may benefit from engaging a paid professional to ensure their returns are accurate, but need to know what questions to ask and what to look for in a tax preparer. A skilled preparer who understands your tax situation, including all the tax deductions and credits available to you, can provide you with the best possible outcome, because if you miss claiming certain tax benefits on a return, they are off the table - the IRS doesn’t claim them for you.
But what are the advantages of working with a paid preparer versus doing it yourself or using software, and what credentials should consumers look for when selecting a tax professional?
- Red flags to watch out for — It’s important to review your tax return completely and ask questions before signing it. Make sure you understand and are comfortable with the accuracy of what you are reporting. Check for errors such as incorrect social security numbers and addresses; these mistakes can delay IRS processing of your return. Also, avoid preparers who ask you to sign a blank return.
- What to look for in a preparer's background — Select someone who is qualified and credible; consult sources like the Better Business Bureau or state boards of accountancy for certified public accountants. You can also ask friends, family or co-workers for references.
- What kind of training does your preparer have — Make sure your preparer is up to date on recent tax changes and understands how those changes may affect you. Ongoing, updated training is also key, since tax law changes often. At Jackson Hewitt, preparers go through a comprehensive training curriculum (including basic, intermediate and advanced courses).
- What to know about do-it-yourself tax software — Taxpayers who have purchased off-the-shelf tax software and plan to prepare their own returns should confirm that these products are up-to-date, as many late-breaking changes have occurred that may not have been integrated by the time of purchase.
- Why it’s important to engage now — The IRS starts to accept 2012 tax returns next week, so now is the time to commit to finding a preparer. The sooner you find the right preparer, the sooner you can start the filing process and ultimately get your refund, if you are owed one.
Whether or not you decide to use a paid preparer or not, this is not the year to go it alone on your taxes. Free resources are available on IRS.gov. Free tax tips, a list of commonly overlooked credits and tax calculators that help estimate important tax elements such as federal income are also available free of charge in the My Resources section of JacksonHewitt.com. If you decide to enlist the help of a paid professional this year, the nearest Jackson Hewitt office can be located from the same site.