Has tax panic, or maybe even full-blown tax hysteria, started to set in yet? At the risk of making it a little bit worse, let me remind you that there are only four more weekends left before the April 17 return filing deadline.
It's no wonder that companies like H&R Block (NYSE:HRB), Jackson Hewitt (NYSE:JTX), and Intuit (NASDAQ:INTU) have found a sizable market by offering tax preparation services and software. Lots of people need help! Right about now, you may be thinking you're one of those people.
Tax assistance can save you if you have a new or particularly challenging tax situation or are just running out of time. Although getting a professional to do the job can relieve you of an onerous chore, you'll want to choose your tax adviser wisely. Even if you pay someone else to prepare your return, you're still legally liable for every item as far as the IRS is concerned. That means you, not the preparer, will potentially be on the hook for penalties and interest.
Choosing the right preparer
Tax preparers come in multiple shapes and sizes. You'll want to choose one according to the complexity of your tax situation. More specialized helpers include enrolled agents, certified public accountants, and tax attorneys. All three can represent a taxpayer before the IRS.
To choose top-notch tax help, start by following the basic Foolish tenets for picking any financial advisor. First, ask tax preparers about their qualifications, including their experience, background, and expertise in new tax laws. (There are always new tax laws.) If you have a particularly complicated tax situation, you'll also want to quiz your potential professional on that area of the law. Be careful with professionals who are recommended to you; you'll still want to check them out.
Then find out about the preparer's fees. Cheapest isn't necessarily best, but you should understand the fee structure and have an idea of what your final costs will be to get your return done. Steer clear of preparers who calculate fees according to the size of your tax refund. Some may take particularly aggressive, or even illegal, positions on your tax deductions and credits to boost their fees.
You'll also want to be on the lookout for the following:
- If you go to a large tax-preparation company or a large firm, find out who exactly will be preparing your return. It may not be the person you initially talk to. Ask about training and credentials for anyone who'll work on your return.
- Seek out help that's available year-round, not just during tax season. This will make it easier for you to get assistance in the remote chance the Internal Revenue Service comes calling.
- A paid preparer must fill out and sign a specific portion of the form at the bottom of your return, along with providing an appropriate identification number. Check that all that information has been provided on your return.
- Review everything before mailing or electronically submitting the return to the IRS. Triple-check your name, address, and Social Security numbers. Read all of the paperwork the preparer asks you to sign. Make sure you're comfortable with everything on the return before signing it, and get copies of everything. Never sign a blank return.
- Ask the preparer about the company's privacy policies and their procedures to ensure that your sensitive information doesn't get into the wrong hands. Also find out whether the preparer will market other financial products to you once you become a customer, and ask how to opt out if you don't want to deal with a sales pitch.
Even if you get help, you'll still need to do a little bit of organization on your own. For help making sure all your tax paperwork's in order, check out these other Foolish articles:
- Sort Your Paperwork Instantly
- Missing Your W-2 Form?
- Are You Ready for April?
- Double-Check Your Taxes
For more Foolish help before the dreaded April filing deadline rolls around, take a look at our Tax Center. You'll find assistance with a broad array of tax topics.
Fool contributor Mary Dalrymple does not own stock in any company mentioned in this article. She welcomes your feedback. The Motley Fool has a disclosure policy.
