As the tax season rolls in, choosing the right tax expert is key but with so many options available, how do you know you are making the right choice?
"It's important for consumers to do a thorough investigation and understand the difference between tax preparers and also a certified public accountant," said Cinthya Lavin, a spokesperson for the South Florida Better Business Bureau.
Tax preparers come in different forms.
Enrolled agents, certified public accountants (CPAs), and tax attorneys, for instance, can represent their clients in front of the IRS, but others might only assist with basic tax forms.
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This distinction is crucial, especially when facing IRS audits or dealing with complex tax situations.
Lavin suggests starting your search by asking friends, family members, or employers for recommendations based on their positive experiences with tax preparers or CPAs.
She warns, however, about the danger of 'ghost tax preparers,' individuals who might leave you in trouble.
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"If the person preparing your taxes asks you to sign the tax return, but they themselves are not signing it, then that is definitely a red flag," she cautions, pointing out that such preparers avoid liability for any issues that may arise with an audit.
When choosing a tax expert, be cautious of those who promise unusually large refunds, a potential sign of unethical practices.
Also, it’s wise to steer clear of 'refund anticipation loans' as they often come with hefty fees.
Read the contract closely and understanding the fees for e-filing state, federal, and local tax returns online.
"If you're going to be entering into a payment plan with the IRS, the person preparing your taxes has to let you know, and you definitely have to agree before signing anything or submitting anything," said Lavin.
She recommends visiting IRS.gov to find a list of qualified professionals and to conduct a general Google search for reviews of the tax preparer you are considering.
Remember, the tax expert you choose will have access to your private information. It's crucial to pick someone trustworthy to protect against fraud.
