Tax Time Tips

Tax season can be a hectic time for taxpayers. Finding the right tax preparer to ease concerns and make sure your taxes are done correctly is of the most importance. Whether you are expecting a refund or paying more to the government, BBB can help find a tax preparer you can trust.

With tax fraud on the rise, many consumers are anxious to file their taxes as soon as they receive their W-2 forms from their employers. But rushing to file could be a mistake, especially if you have a complicated return.

Better Business Bureau (BBB) advises consumers to check a tax preparer’s BBB Business Review first and to watch out for pitfalls that trip up taxpayers every year. Make sure you have all documents, such as 1099 forms, before you file.

Some tax preparation companies are open for only a few months every year, and it can be hard to track the preparer down if there are problems with your return. Last year, consumers filed 3,195 complaints with BBB about tax preparers, citing delays in getting refunds, poor service from preparers or tax preparation offices that shut down abruptly.

Not all tax preparers are created equal, so it’s important to check their qualifications. Ask what certifications they hold, how long they’ve been preparing taxes and what will happen if the Internal Revenue Service rejects or challenges your return.

Some tax preparers may offer to give you a check or debit card rather than wait for the IRS to mail your refund. BBB advises consumers that these are typically loans, sometimes with hidden fees and interest rates of 50 to 500 percent. If a preparer makes a mistake in calculating your refund, borrowers may have to pay back the loan plus any fines and fees.

In most cases, tax refund loans give consumers their refund no more than a few days faster than the IRS, which can deposit refunds in your bank in as few as 10 days.

The IRS has issued warnings about online and telephone schemes that can steal taxpayers’ identities. The IRS doesn’t initiate contact with taxpayers by email or phone, and it won’t request personal or financial information or inform you of an audit that way.

Scam emails may say that there’s an issue with a refund, that the taxpayer is being audited or that there’s a delay in processing the tax return. Links in the emails usually go to a scammer’s website, which asks victims to enter Social Security numbers, bank account or credit card information, a big red flag. The site could automatically install viruses or other malicious software on victims’ computers or steal your identity.

The IRS says taxpayers should suspect identity fraud if they receive a letter from the IRS saying that more than one tax return was filed for them or if the letter states that you received wages from an employer you don’t know. Someone may have obtained your Social Security number and used it to file a return in an attempt to get your tax refund before you do. If this happens, you likely will have to file your return on paper, and you may need to visit an IRS office to resolve the problem.

If you decide to hire a tax preparer, BBB advises that you:

• Ask for referrals from friends, but check the preparer out with the BBB at bbb.org or by calling 573-803-3190 before you hire anyone.
• Check credentials. Is the preparer a certified public accountant (CPA), a tax lawyer or an enrolled agent? Will the preparer sign your return and provide you with a copy? Does the preparer belong to a professional organization that requires members to adhere to a code of ethics?
• Be wary of promises that you’ll get a refund. Until the preparer knows your situation, there is no way to know whether you’ll get a refund or how big it will be.
• Check accessibility. You may need to contact your preparer after tax season is over. Will he or she be available?
• Read the contract: Know what preparing your return will cost, what the fee covers and whether the cost changes if you have a complicated return. Will the preparer represent you in case of an audit?
• Check your return: Before you sign the return, read it over to check for mistakes. Ask the preparer to explain anything you don’t understand. Don’t forget to sign it.

Consumers may obtain a BBB Business Review on an individual business at bbb.org or by calling 573-803-3190.