Tax time is here, and if you aren’t cheering, it’s probably because you’re thinking about the mountain of paperwork that you need just to file the return. Most people don’t realize how much paperwork is involved in doing their own taxes until they actually sit down and do them. This can be pretty stressful and take up a lot of time.
However, this is the season where tax preparation services go wild with trying to get people in the door. Form advertising low prices all the way up to letting you know how thorough the returns are handled; it’s no secret that they want your business. However, should you give it to them? And if so, when is it really appropriate to get a tax preparer?
Let’s go through a few terms first. Not all tax preparers are created equal, and it shows through their experience as well as their rates. Does a holding company take their taxes down to the local tax prep franchise? Not if they really want a good job. Now, that might seem like a knock against all of the great tax preparers doing work at an H&R block, a Liberty Tax service, or even a Jackson Hewitt, but the truth is that you really need to have a CPA looking over super complicated tax cases. It’s your money, and it’s your business.
However, if you don’t have that complex of a situation — some employee income, a few dependents, and maybe a home — you can take your taxes to the franchises listed above. You can also do them online, but if you know that you won’t have time to devote to it, it’s better to hold off than to dive in and make some key mistakes that could really cost you.
A good tax preparer should be something that you really think about. Again, this is the person that’s going to be handling some pretty sensitive information about you, and doing it in a way that either maximizes your refund (good) or lowers your tax liability (equally good, if not better.) If you have time to really shop for a tax preparer, you should take it and use that time to ask tough questions. How do they handle audits? Do they offer any support for that? What are their hours of availability? Can you come back and ask questions? Do they handle amended returns if you’ve overlooked something? You also need to ask whether or not you’ll have to stay there while the taxes are being prepared. Some services tout the ability on your part to leave, while other services expect you to set up an appointment where you can stay in case the preparer needs to ask you something.
These are all great questions to ask, and you should definitely make sure that you get answers.
Be wary of any tax preparer that says how much money to the penny they can get you — this is a sign of bad things to come. They could cheat and cut corners that would eventually cost you a lot of money in the long run. These mistakes cost you big money, and the way these services are set up…liability can be very slim, and often none. It depends on the fine print that you signed before the preparation was started.
In addition, you will need to most likely be firm with the tax preparer, especially if they’re part of a greater franchise. The rise of refund anticipation loans is pretty strong, and a lot of people find them a good thing. However, if you really want to cut down on your fees, it’s better to just wait until your returns come back the natural way. Returns are direct deposited faster than ever, which means that you could get your refund within 8-12 days rather than the 4 weeks that it used to take in the past. Of course, you should also be wary of any tax preparation service that tells you exactly when your refund will be deposited. It varies from year to year, and it depends on the volume of returns processed by the IRS. Keep this in mind, and you should have no problems in the future.
So, when is hiring a tax preparer appropriate? In a nutshell, it’s appropriate when you want convenience, when you want a more thorough job than what you can provide, or when you really want to just get the whole process over with. After all, only accountants and tax lawyers seem to look forward to taxes, and even then the jury’s still out on the exact numbers — good luck!