You have many options when deciding where to get your taxes done. You can have them prepared on the spot, submit them via mail or electronically to a preparer, or you can drop them off to be prepared later. Understanding the difference in preparers and determining whether they are reputable, will improve your chances of receiving an accurate return.
There are many types of tax preparation firms and people, separated by licensing, office type and experience. With a variety of preparers, fees also vary greatly. Tax preparers are not required to maintain licensing in any states, except California and Oregon. In these two states, preparers are required to have a state license. In the other 48 states, you can choose unlicensed tax preparers in addition to the various licensed preparers. Many franchise tax preparation firms employ unlicensed tax preparers.
Enrolled agents, licensed by the Department of the Treasury, are the only tax professionals tested solely on taxation, with continuing education focused on various areas of tax as well. Certified public accountants carry a broad license that covers tax, auditing and assurance, and public company reporting. Practicing attorneys licensed by their state are able to prepare taxes as well, although not all attorneys practice tax. Unlicensed tax preparers are not required to have experience or obtain education, but can legally provide the same services in most states.
There are many major competitors in the tax preparation market. Franchise tax preparers such as H&R; Block, Liberty Tax and Jackson Hewitt are in retail storefronts near major chain supermarkets and retail outlets. They typically prepare your taxes while you wait. Nationwide nonfranchise tax preparers including companies such as Grant Thornton, BKD, LLP and Clifton Gunderson, are often near downtown areas in large buildings, servicing all kinds of accounting and tax clients. Same-day service is less common with these firms. Local tax preparers range from home office single-employee firms to large professional offices with many employees offering a variety of services. Using a service such as accountantsworld.com delivers local tax preparers via a brief online search.
Tax returns are usually due April 15, and extensions are due Oct. 15. In order for your preparer to complete and submit your tax return before the April deadline, you must submit your tax data early in the year. Tax preparers often require a specific amount of time to complete your tax return. You must have your tax data in their possession before the deadline to file.
Paying a tax preparer does not protect you from filing an inaccurate tax return. Your preparer is responsible for due diligence. However, you ultimately sign the return, indicating you have reviewed and approved of the tax return. Because of your responsibility, you should ask the preparer to go over your tax return with you and explain the items listed.
Avoid tax preparation firms promising refunds before calculating your tax or claiming to have affiliation with the Internal Revenue Service. The Internal Revenue Service does not affiliate with any tax preparation firms for recommendations. Check with the Better Business Bureau before taking your taxes to a preparer. Additionally, licensed tax preparers maintain standards of practice, reducing the odds of malpractice.