How to Choose a Tax Preparer

Income-Tax-PreparerAre you hiring someone as a tax preparer to prepare your tax returns? Have you chosen the right tax preparer for the job? When choosing a tax preparer, it is recommended that you make your selection carefully as improperly prepared taxes can lead to legal proceedings and large fines and penalties.

Make your selection of a tax preparer easier by considering the following points before finalizing your decision:

Qualification of the Tax Preparer

New regulations set by the IRS require that all tax preparers must have a Preparer Tax Identification Number (PTIN). Additionally, it is also best if your chosen tax preparer works with a professional accountancy or tax-preparing firm. Furthermore, your tax preparer must have necessary educational qualifications to calculate your tax returns.

Tax Preparer’s History

You should not hire a tax preparer with a doubtful history. Check past records of local authorities, bar associations, and accountancy boards to determine that no disciplinary actions have been taken against your selected tax preparer.

Service Charges

In order to find the best tax preparer for yourself, you need to aware of the cost of their services. Rather than opting for a percentage-based payment, opt for a tax preparer who can provide you with exceptional services at flat rates.

Electronic Filing of Tax Returns

Many tax preparers nowadays use e-filing methods to file your tax returns. Electronic filing prevents wastage of paper, allows you store less paperwork in your home or office, and is extremely convenient. Thus, when choosing a tax preparer, determine whether they will provide you with e-filing services for your tax returns.

Accessibility

Tax preparers should be available to their clients even after filing the tax returns so that you can contact them at any point in time if questions arise with regard to your filed tax returns.

Documentation

If you want the tax preparer to file accurate tax returns, then you need to provide them with all of the necessary documents related to your accounts and taxes. These documents include complete financial records of your accounts, as well as an organized collection of your receipts.

Signing the Return

Even after you have hired a tax preparer, you need to make sure that they have completely their work to perfection. As a rule, always review the finalized tax returns before signing and filing them. Additionally, never sign a blank tax form before the tax returns have been prepared.

Guidelines for Income Tax Preparation

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Income tax is something that most people have to go through at some point in the year. Not being prepared beforehand can be the cause of a number of losses. Income tax preparation is absolutely necessary for efficiently managed taxation. Anyone who receives of any sort of income is applicable to these taxes. There are a number of online income tax preparation and free income tax preparation services available.

Income Tax Preparation usually requires information about:

  • Personal Data like social security number, alimony, etc.
  • Employment and Unemployment history
  • Expenses
  • Financial assets and liabilities

Here are a few guidelines for transitioning into smooth income tax preparation.

Time Your Taxes

Income tax preparation is efficiently done if you invest some time and effort in filling the complicated forms beforehand. Managing your income tax returns with the help of an accountant at the right time saves you from the fatigue and issues caused by last minute income tax preparation.

Choose the Right Form

Income tax preparation deals with the selection of the right form. Depending on the modes of income, there are a number of forms available for the filing of income tax returns. Every person who receives an income through any medium is usually applicable to the basic 1040 form. This form is common to all modes of income if the annual income is greater than $50,000.

Further branching out of this form has 1040EZ and 1040A for income tax preparation, where the EZ option is for single people who live without dependents and A is for people who have an income that is less than $50,000.

Online Income Tax Preparation

If your job or business has made you good at calculating taxes efficiently, then you can opt for an online income tax preparation software. This allows you to file tax returns in a convenient, economical and quick manner. There are a number of efficient software available online; choosing the right one depends on the requirements of your forms.

Serviced Income Tax Preparation

There are a number of services that can be hired for income tax preparation if you feel that you cannot manage all the numbers and paperwork. These tax preparers charge a fee for their services but are highly efficient in the performance of task return filing tasks.

Income tax preparation is one task that can cause many headaches to most people. Some people can opt for free income tax preparation services, but it is always better to be on the safe side by having a professional team by your side to tackle complications raised by the IRS.