Consumer Reports Tips to Get the Most for Your Tax-Prep Dollar

2:05 pm

in money saving tips

I’m doing something a little bit different today since a) it’s still tax season and b) I think this is some pretty good information to keep on hand.

The March 2010 issue of ShopSmart, from the publisher of Consumer Reports, featured an article basically spelling out the things you need to know and do to ensure that you’re getting the best value from your tax preparer.  
 
Pick the right pro. Tax preparers have varying levels of expertise and charge accordingly. What you’ll pay might also differ by the size of the firm. These are your basic tax-prep choices:
  • Certified public accountants. Not all CPAs specialize in doing individual income tax returns, so ask up front. To find a CPA, ask friends or go to www.aicpa.org.
  • Enrolled agents. Unlike CPAs, EAs focus solely on taxes and must have worked for the IRS for at least 5 years or passed exams on tax codes and calculations.. To locate one, go to www.naea.org.
  • National tax-prep chains. Storefront operations like H&R Block, Jackson-Hewitt and Liberty Tax Service can be adequate for simple, straightforward returns and they’re relatively inexpensive.
  • Free tax prep. If your household income was low to moderate for your community or you’re 60 or older, AARP’s Tax-Aide service will provide you with tax help. For locations and dates of Tax-Aide events, go to www.aarp.org/money/taxaide.
 
Ask the essential questions. Before you sign up with any preparer, ask some basic questions.
  • What kinds of clients do you usually work with? Look for a preparer with clients similar to you.
  • What are your credentials? Look for a preparer who has passed recent state or federal tests and 7 to 10 years experience.
  • Will you file my returns electronically? Filing electronically ensures fewer mistakes and helps speed your refund.
  • Can you give me a price quote? Try to get a price quote by presenting last year’s forms. Ask for all fees and avoid preparers who base their fee on a percentage of your refund.
  • Do you provide audit help? CPAs and enrolled agents can usually represent you before the IRS, but you might have to pay extra.
 
Get organized. The earlier you get your tax act together, the better the result is likely to be.
  • Know your numbers. The fewer blanks you have to fill in later, the faster you can file and get your refund.
  • Lose the shoe box. Buy an acordian folder and use each section for different categories: one for Form W-2s from jobs, another for Form 1099s showing interest and dividends, and so on.
Was this helpful to any of you?  Let me know!  Now I’m off to get my taxes prepared.  🙂

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