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5 Signs You’ve Got a Lousy Tax Preparer

1.Your preparer promises a big refund

Any tax preparer who flat-out guarantees a big tax refund may be leading you on – especially if they haven’t seen your financial documents yet.

One of the biggest scams are tax preparers who advertise they can guarantee you the biggest refund before they even look at your tax information.

One potential tactic that results from their promise of a big refund is to juggle the numbers on your tax return to generate the big payout, but that risks an IRS review and bigger problems down the road.

2. Your preparer doesn’t have proper credentials.

You can avoid potentially serious issues simply by checking to see if your tax preparer has the correct identification. The IRS recently began assigning Preparer Tax Identification Numbers (called “PTINs”), so if your tax specialist can’t provide one, you may be courting trouble by using an unlicensed preparer.

3. Your refund is not deposited into your bank account.

If a tax preparer insists that any refund check be made out to his or her company, or deposited directly into a bank account without your name on it, that’s a huge red flag that your refund may not find you when all is said and done.

4. The preparer’s fee is based on a percentage of your refund.

Reputable tax prep firms charge a flat fee for their services, based on the size and scope of your tax return. If a preparer bases your fee on a percentage of your tax refund, that should be an immediate deal-breaker. That only gives the preparer incentive to pump up your refund by any means possible, which can invite some mishandling of your financial information.

5. No matter what, check with the Better Business Bureau.

The IRS advises a full review of your tax specialist before handing over your documents. Step one is to check with the local Better Business Bureau. If you see your tax preparer’s name listed, regardless of the details, it’s probably best to keep looking for someone with an unblemished record.

This isn’t to say that most tax preparers are unethical or unprofessional. By and large, most are diligent, talented and honest. But with your good name on the line, it’s best to thoroughly review any tax specialist you’re thinking of bringing aboard.

That’s just good business, and good common sense.

If your taxes are simple and you are wary of hiring a tax professional ask me, and I’ll give you an honest opinion based on your needs.

8 Things to Do Before You File

Here is what to do before putting your tax return in the mail (or sending it online):

Double-check all Social Security numbers entered on all pages of your return.

An incorrect number will hold up your refund. If you changed your name during the year because of marriage or divorce, you should notify the Social Security Administration and receive a new Social Security card before filing a return with the new last name.

Sign your return in the proper place.

If you are filing a joint tax return with a spouse, both of you must sign. If your spouse passed away during the year, sign on the first line and write “Surviving Spouse” on the line for the spouse’s signature. Special rules apply if you are signing the return for a non-spouse deceased taxpayer or for someone else under a power of attorney.

 

Make sure the preparer signs the return.

If you paid a professional to prepare your returns, you’ll need his or her signature and the Preparer Tax Identification Number (PTIN) issued by the Internal Revenue Service.

Attach Copy B of all Forms W-2, W-2G and 1099-R with federal income tax withheld.

Uncle Sam is very particular and wants Copy B and not Copy C or Copy 2. If you attach the wrong copy, the IRS may return the form to you.

Mail your return to the correct address.

The IRS often changes the mailing address for returns. The address is determined by your state of residence. It is listed in the instruction booklet or at the IRS website. If you have a balance due, you must use a payment voucher (1040-V), and mail your return to a lockbox instead of directly to the IRS.

Make your check payable to “United States Treasury Service.”

If you owe money to Uncle Sam, the check should be made out to the U.S. Treasury and not to the Internal Revenue Service or IRS. Write your Social Security number and “2016 Form 1040” (or “2016 Form 1040A”) on the check.

Make a copy of the return for your records.

Or, if you hired a preparer, be sure you get a copy from him or her.

Have the envelope weighed to be sure there is enough postage.

Also, include your full return address.