Before you pay someone to do your taxes for you here’s some federal income tax advice to remember before you pull the trigger.
- Complaints about tax preparers were up 80% in five years. This includes complaints for things like late filing, missing W-2s, base inaccuracies, or completely missing or lost filings. The solution is to get help with your filing from a service like RapidTax. You get 24-hour help if you’ve any questions, and you know for a fact that it was sent in on time.
- On average, “tax preparers” at tax return offices make more mistakes, and costlier ones, than the average taxpayer. The IRS says that 56% of professionally prepared returns had “significant errors” compared to 47% of those filed by the taxpayer. Think about it: these tax organizations like H&R Block have to hire gobs of seasonal employees. The person doing your return likely has no idea who you are, and therefore, no real obligation to make sure he gets it right. He’s there to slip under the radar, take a long lunch, and cash a paycheck, not double-check your above the line deductions.
- Any jerk off the street can call himself a “tax preparer.” And the scary thing is, he’d be right; unless you’re ponying up for a CPA, there’s no universal standard for qualification. In fact, only Oregon and California have any kind of system in place to determine whether or not the person filing your taxes is a complete fraud. There’s no way to know if the person you’re shelling out cash for is any more qualified than you are to file your return.
- It’s possibly too late to get the attention of a legitimate tax professional. Between February and April, “’you’re not going to get good service,’ says Frank Degan, and enrolled agent in Setauket, NY. ‘In the fall, tax preparers will give you their full attention.’” If you dive into the tax preparation waters now, you’ll likely end up in the kiddie pool with the unlicensed, uncaring, minimum-wage seasonal employees.
- Many accountants use tax preparation websites like RapidTax to file claims. No big deal if you simply don’t want to spend the hour or so to input numbers into fields. But if you’re expecting some kind of time-intensive numbers-crunching from your accountant, it’s quite possible he’s taking it easy, using a site like RapidTax. And he’s getting paid $50 an hour to do it.
- Outsourcing is a big business. Your accountant isn’t obligated to tell you if he hires someone halfway across the country to complete your return. In fact, he could take your (and your neighbors’) return and hand them off to the local tax preparation chain. The only thing he’s likely saving you is a trip to H&R Block.
SmartMoney has more info on the dangers of using a tax return office and how to avoid them.