- Some tax filers may need help with their upcoming returns.
- A few savvy moves could help you save money doing your taxes and have a better experience all around.
Need help doing your taxes? Here's how to find the right person.
Tax season is upon us, and the sooner you get started on your tax return, the sooner you can expect your tax refund to hit your bank account. But you may not be able to tackle your taxes yourself.
If your tax situation is fairly straightforward, it’s reasonable to file taxes on your own. This especially applies if you're planning to claim the standard deduction on your taxes rather than go through the more complicated process of itemizing.
But if your taxes are more complex, then it pays to enlist outside help. You should consider hiring a tax preparer if you own a small business, are self-employed, or have a number of different income streams (for example, a salaried job, a side hustle, and a rental property).
If you've never used a tax professional before, you may find the idea of choosing one a little daunting. Here are three tips on how to go about the process.
1. Shop around
Just as it's a good idea to gather quotes from different contractors when undergoing a home renovation, so too is it smart to gather quotes from tax preparers. This doesn't necessarily mean you should go with the person who charges the least. But getting different quotes will help you determine if you're being grossly overcharged.
Say you get five different quotes -- two for $400, two for $450, and one for $600. It may be that the tax preparer looking to charge you $600 brings special skills to the table. But they may also be trying to take advantage of you.
2. Opt for a flat fee
Some tax professionals charge an hourly rate for their services, while others charge a flat fee. The latter arrangement is preferable. With a flat fee, you'll know what your total bill for that service will entail and you'll have an easier time budgeting for it.
Furthermore, while this practice is less common, some tax preparers calculate their fees as a percentage of your refund. That's not an arrangement you want to sign up for. While it could, in some cases, mean paying less, you never know if a tax preparer might push the limits on claiming deductions to score a higher fee. If your tax return is audited and you're penalized for bogus deductions, that'll ultimately be your problem.
3. Solicit recommendations
There are many tax professionals out there. A good way to narrow your pool is to ask friends and family members for recommendations. An even better bet is to ask for endorsements from people whose situations are similar to yours. If you own a small business, for example, you may want to ask fellow business owners who they use.
The right tax preparer could help you eke out more savings and make filing taxes less stressful. Use these three tips to identify the ideal person for the job -- and let someone who knows what they're doing take over your tax return so it's done right.
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