A NerdWallet survey found a couple of years ago that about a third of the American citizens, especially Millennials, hire tax advisors and preparers to file their taxes. While the services of a tax preparation company in Santa Ana and other parts of the US are commonly used, not many people know much about them in detail.
The survey also revealed that 80 percent of people who have used the services of a tax preparation company, never inquired about the credentials of the preparer and 75 percent of them never even asked if the tax preparation company would represent them in case of a tax audit. Given that you will be sharing the most intimate financial details with the tax preparer, like your social security number, bank account details, annual income, details of your family members, etc. it is essential for you to choose the right tax preparation company in Santa Ana and other states of the US after thorough research.
Seven Tips For Selecting the Best Tax Preparation Company
Here are seven great tips that can help you find the best tax preparation company near you.
1. Inquire About the Preparer Tax Identification Number:
According to the Internal Revenue Service (IRS), any individual who assists or prepares federal tax returns for clients must have a Preparer Tax Identification Number (PTIN). Therefore, the first thing you need to inquire about the tax preparer is their PTIN. However, this unique identification is not required to be carried by individuals who prepare taxes on voluntary basis. Once you hire a tax preparation company, ensure that the preparer puts his/her unique PTIN number on the filed return, as mandated by the IRS.
2. Go For an Enrolled Agent or CPA:
While a tax preparer having a valid PTIN is enough for filing basic simple returns, you need to go a step further if your requirements are a little more complex, in which case you might need the help of someone who has thorough expertise in tax preparation.
In such cases, it is best to choose an enrolled agent, certified public accountant, or anyone who has successfully completed the IRS’ Annual Filing Season program. For an individual to pass these programs successfully and earn all the credentials will require an extensive amount of studying, ongoing education, and the taking of multiple exams.
3. Compare Service Fees:
As of 2018, according to the National Society of Accountants, the average fee for preparing a federal tax return was $294, including a state tax return and an itemized Form 1040 with Schedule A. The approximate fee of preparing a 1040 form or a state return sans the itemized deduction was $188.
Legitimate and licensed tax preparation companies and individuals usually charge their clients by the hour. So, if a tax preparer is asking for fee based on the size of the refund you will get, then that is a red flag that you should not ignore. You should also beware of tax preparers who claim that they can get you more returns than others in the market.
4. Don’t Choose Tax Preparers Who Do Not E-File:
The IRS has mandated that any tax preparer who conducts more than 10 tax returns for clients will have to file the submission online via IRS’ e-file system. Therefore, if the tax preparer you have chosen does not offer e-filing, then it may be an indication that the person does not do much tax work and it would be best to move onto someone more experienced so as to get better returns.
5. Must Sign the Dotted Line:
According to the law, paid tax preparers and tax preparation companies must sign the tax return for their clients and provide their PTINs as well. So, if your tax preparer insists that you sign a blank tax return, do not comply, as the tax preparer can put anything on the form and can even steal your tax return.
6 . Representation for Tax Audits:
Will the tax preparation company have your back and represent you in front of the IRS in case of tax audits?
Certified Public Accountants, tax attorneys with PTINS, as well as enrolled agents can represent their clients in front of the IRS in case of appeals, payment and collection issues, as well as audits. Tax preparers who do not have PTINs, cannot represent you even if they have prepared your taxes. Under such circumstances, only the individuals who have passed the Annual Filling Season program with full credentials can represent the clients in front of the IRS.
7. Is He/She Available During Times of Need?
The quality of a tax preparation company or a tax preparer can be gauged not only during the tax season but also afterward. If the tax preparation company or the individual answers your queries, responds to your calls and emails, and solves your problems long after the filing season is over and the tax return has come, then you will know that they can be trusted to file your taxes over the long term.
The tax season is just round the corner and people are busy filing their tax returns or looking to hire an experienced tax preparation company in Santa Ana and other states of the US. Hopefully, the above-mentioned tips will help you hire the best tax preparation company near you, so that you can get the maximum returns with minimal hassle.