The April 15 tax deadline is approaching, and if you haven’t yet selected a tax preparer, here are some tips from the California Board of Accountancy to help make a wise choice.
- Get recommendations from family, friends, and others you trust who may have had similar tax preparation needs.
- In California, the only individuals allowed to charge a fee for preparing taxes are
Certified Public Accountants (CPAs), Public Accountants (PAs), Enrolled Agents (EAs), attorneys, and California registered tax preparers (CRTPs).
- Only CPAs, EAs and attorneys have unlimited representation rights before the IRS and may represent their clients on any matters including audits, payment/collection issues, and appeals.
- In addition to tax preparation, are you looking for an accountant to assist with financial planning, estate questions, IRS issues, or business planning?
- Review the tax preparer’s history with the appropriate licensing authority. The Board of Accountancy for CPAs and PAs provides the public the ability to check the status of a license with “License Lookup” on its website, cba.ca.gov.
- Check the California Tax Education Council (CTEC) for California registered tax preparers; the U.S. Department of the Treasury for enrolled agents; and the California Bar Association for attorneys.
- Meet the tax professional: Because you will be trusting someone with your financial information, being comfortable with them is important. Interview them, preferably in person, but at the very least, by phone.
WHAT TO ASK A PREPARER
- What type of tax work do they typically perform?
- What office hours does he/she or the firm keep? Are available to take phone inquiries?
- What type of continuing education have they recently completed? It is important to select a CPA who has completed continuing education consistent with the type of services you are selecting.
- Has the tax preparer been disciplined?
- Does he/she carry professional liability insurance? This helps protect consumers in the event a claim is made for damages arising from a tax preparer’s failure to perform tax or other services satisfactorily.
- If you hire a CPA, ask for an engagement letter that details who will be performing the work, confirms that all personal information is secure and won’t be disclosed without your permission, and specifies the cost of the services.
- Ask about fees. Avoid preparers who base their fee on a percentage of your refund or those who say they can get larger refunds than others can. Always make sure any refund due is sent to you or deposited into your bank account, not the preparer’s.
- Ask about anything on your tax return you don’t understand, and review all information before you sign your tax return: name, address, Social Security numbers, or other tax identification numbers. Even if a professional is preparing your taxes, you are responsible for what is on your return.
- Never sign a blank return. Don’t use a tax preparer that asks you to sign a blank tax form.
- Don’t use a tax preparer that refuses to sign your tax return or complete the required tax preparer information.
- Be certain to get a copy of your completed return.
- E-file and request a direct deposit refund. You will generally receive your refund much more quickly, and it reduces the chance of identity theft.
- If you need extra time, you can file IRS Form 4868 by April 15 and delay filing your federal return until October 15. However, getting the automatic extension does not delay the requirement that you pay your taxes by April 15, and penalties could be imposed and interest charged on taxes not paid by the deadline.