Choose a tax professional wisely

May, 01 2019 by Selena Quintanilla, CTEC

Whether this is your first or fiftieth year filing a tax return, at some point you may find yourself needing some professional guidance. Choosing a tax professional is almost as important as choosing a doctor. 
  
Here are a few things to keep in mind when searching for a tax pro this season: 
  
Paid tax preparers must hold a valid PTIN with the IRS.  
  
PTIN stands for Preparer Tax Identification Number. The preparer is required to sign your return with their name and PTIN before submitting it to the IRS or applicable state agency. For e-filed returns, make sure the preparer is willing to sign before he or she files it digitally. If the preparer is hesitant or refuses, that's a good indication that you're doing business with a ghost preparer.  
  
A ghost preparer is any person who receives compensation for tax preparation but does not sign completed tax returns. And just as quickly as they appeared, they will disappear after you pay them for their (illegal) services. Their refusal to be associated with their own work should be a warning sign for taxpayers.  
  
In a move to protect taxpayers from these phantoms, certain states require education and testing be completed before any person can prepare taxes for compensation. California, Connecticut, Illinois, Maryland, Nevada, New York and Oregon currently have regulations in place. The IRS also imposes penalties for infractions. Click here for the complete list of preparer related penalties. 
  
If the ghost preparer can do it in TurboTax, you can too!  
  
Seriously! TurboTax exists to make filing as easy as possible for all taxpayers. For this reason, you should be able to easily replicate the same outcome as your preparer can using the software. If your preparer is plugging information into TurboTax and magically getting you a huge refund unlike any refund you’ve ever received before, be aware that this may be both unethical and illegal, which can have serious consequences for the preparer and for you.  
  
I usually receive my W-2 early into the start of tax season but wait to file until all applicable documents have been received. During this "downtime," I make use of TurboTax's refund calculator to see what my estimated refund or liability will be. While the calculator isn't expected to be 100% accurate, it's proven to be close enough for me in previous years. Take a stab at this before you hire an outside source to prepare your return.  
  
You are responsible for the accuracy of your tax return, even if you pay someone else to prepare it.  
  
This is important. Be sure to review the return thoroughly before signing off on it, and ask questions about any entries that are unclear. Exaggerated numbers, unauthorized credits, forged documents, and unauthorized dependents are several items to be on the lookout for. If everything looks good, you’ll want to make sure your bank’s routing number and your account numbers are correct. Under no circumstance should your preparer's bank information be entered in lieu of your own.  
  
See what I mean? Choosing the right tax preparer is serious business. While picking the wrong tax professional may not impact your physical health, it could have a severe impact on the health of your finances. So choose wisely!