April 15th Cometh!
April 15th is coming closer and closer by the day! Have you started working on your taxes yet? This economy makes it especially important to select a tax advisor who will make the most of your financial situation. Do you know how to find the right tax advisor for you?
Tax preparer vs. tax advisor/planner
Beware that there is a difference!Tax preparer
What are the tax preparation fees for tax preparers and tax advisors?
Like so much in life, there's no black and white answer. All depends on your income, the intricacy of your tax preparation, and whether you use a tax preparer or one of the professional tax advisors. A basic tax return for income from interests, salaries, dividends and no itemization accounts can be prepared between $125 and $200. Things become more expensive when they become more complicated. For example, forms that involve itemization, a business, rentals, brokerage trades, or Earned Income Credit may cost from $450 or higher.But, I can't afford to pay a fee!
I can do my own tax form preparation.
Many depend on their own knowledge or programs like TurboTax to prepare their own taxes. Doing your own taxes certainly will save you the cost of a professional's fees, but may not give you the best return in the end. Most of us don't have a background in all the legal deductions for which we may qualify in our state.
What should a tax preparation fee include?
It's important to find out what the fee will be before the forms are prepared. For your tax preparation fee, you should receive a brief consultation before the tax return is prepared, discussion of any concerns about the tax return at any point of time until the return is filed, the electronic filing of your tax forms, and extra copies of the return. This person should also be available to answer questions even after the tax forms have been filed.
How do I know whether to use a tax preparer or a tax advisor?
Your decision would be based on your own particular financial and tax situation. If you're in the low to average income bracket and you're filing a basic standard deduction, then a qualified tax preparer may suffice. If, however, you're in a higher income bracket and filing a more complicated tax return, it may be worth the additional amount for a professional advisor who is better trained to get you the best return.
How do I make the right choice of tax preparer or a tax advisor?
Remember, ultimately you are the one legally responsible for any errors when you sign the completed tax forms. For this reason, be sure to do your due diligence in selecting the person to prepare your taxes. Select someone who specializes in your particular area of need (small business, estate taxes, etc). This may change from year to year. Interview one or more possible choices. Ask for references and a license number. Check to see if the preparer has any questionable history with the Better Business Bureau, the state's board of accountancy for CPAs or the state's bar association for attorneys. Do NOT use a tax preparer who asks you to sign a blank tax form!
What about references from a friend?
Just because a friend was happy with their tax preparer or advisor doesn't necessarily mean that person is right for you. The person you select will not be working with just numbers, but your personal income and financial worth. It's crucial that you select someone who you're confident is ethical and qualified. Friendship should not factor into the choice.
Where can I find a listing of tax advisors?
Many reliable directories of accountants and tax professionals can be found online. These listings offer a selection of professionals in your area, including their specialties and qualifications. Also, the National Association of Enrolled Agents is an excellent resource for tax help. Then, it's your job to check out each individual's credentials and chose the person who can do the best job for you.
Run away from anyone who promises magical ways of saving you tons of money. Be wary of sales pitches and potential conflict of interest. Someone who is unethical and uses illegal practices will be putting you in financial jeopardy when you sign the forms.
What can I do to help the tax preparer or a tax advisor?
Make certain that all the information, receipts and paperwork you supply is complete and accurate. They are totally dependant upon what information you have supplied them. Answer any questions completely and honestly. Finally, carefully and thoroughly review your tax return and ask questions before signing it.
Taxes are a yearlong thing — not just April 15th!
If you have a more than average tax situation, you should consider finding a tax professional who will guide your financial decisions throughout the year. They will help you come up with a yearlong plan with the tax preparation being the final step. The financial choices you make mid-year will directly affect the outcome of your tax returns on April 15th!
Don't waste a minute longer!
April 15th comethâ€¦and soon! Take the time to do your homework and find the right tax advisor today!
Our thanks to Jim Berry of www.BookkeepingHelp.com (a national directory of tax service professionals) for his assistance with this article.
Filing taxes: What to know before choosing a tax pro
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