Tax season can be a stressful affair, which is why about one-third of individuals who file taxes use a service. Nothing better than a trained professional to make sure every ‘t’ is crossed and every ‘i’ dotted. Not to mention that tax professionals know how to find exemptions John Q. Taxpayer is unaware of. Unfortunately, like any contracted business success or failure depends on the service that is chosen. As many people are unaware of what to look for in a tax or accounting service, here are some key factors to consider.
Are They Legitimate?
Legitimacy is the first important thing to look for in a tax or accounting service. It is also easy to find. The IRS requires individuals or entities that prepare tax documents to have a Preparer Tax Identification Number. So the first thing a potential client should inquire about is the company’s PTIC. If they have one it is a good sign they are a legitimate business.
The next thing to look for is proper credentials. PTIC’s are easy to come by, but accreditation takes a little bit of work. Individuals who carry accreditation are certified public accountants, licensed attorneys, or enrolled agents who have completed a qualifying IRS’ Annual Filing Season program. Such individuals are usually referred to as an advisor and accredited tax preparer or an accredited business accountant. Luckily, all one has to do is consult the IRS’ directory. Every name listed in there is someone the Internal Revenue Service deems perfectly qualified to prepare taxes.
Look at Accolades and Associations
Once legitimacy has been discerned it is time to vet professionalism. Potential clients should be on the lookout for accolades and associations. If the tax preparer has won a few distinguished awards it speaks well of them, but if they are associated with some big-name companies that are even better. If legitimate businesses, important organizations, and key individuals trust a preparer with their taxes they are obviously very good at what they do. These accolades and associations should not be hard to find either. Any decent tax preparer worth their salt will brag about it, list the accolades in their marketing material, use them as references, and place plaques in full view.
Look for Warning Signs
The main danger many faces when using accounting and tax services is that their particular return will be handled callously. The agents will either not spend any time on prep, shuffle it to the bottom of the file, or simply offer the bare minimum when it comes to service. Another danger is that the service will take advantage of the client with high costs. One way to avoid this is by looking for warning signs. The first is in the way they charge for services rendered.
Legitimate services usually bill by the hour. This is because they are charging clients for their work. If they charge based on the size of the return itself this is a warning sign. It means they are more concerned with profit. It also means if customers return is not sizable they may not get the same service.
Another warning sign to be on the lookout for are services that do not e-file. Filing electronically is a mandate the IRS requires of any service that prepares more than ten returns. If a company does not e-file it may speak to their overall preparation and work ethic.
Finally, the last warning sign is whether the company will go to bat for its customers in the event of an audit. Legitimate preparers can represent their clients if the IRS comes knocking. They can aid taxpayers in every aspect an audit represents from setting up payments to appeals. If they are unable to do that it speaks to their professionalism and capability.