Income Taxes are NOT rocket science
People Pay Too Much
For many years, big and small tax preparers have been charging tax payers ridiculous amounts of money to prepare their income taxes, and many times the fees make no sense. The truth is many take advantage of tax payers that are not well informed and trust tax professionals without questioning. According to to the CPA Practice Advisor "The average cost of a professional income tax preparer to handle a "typical" 2014 tax return (the one filed by April 15, 2015) was $273 this year."
You should never pay more than $250
Obviously, tax returns vary in complexity, but if you are an employee with a W2, do not have additional income, and do not itemize expenses, you should never pay more than $250. Beware of tax preparers that are not clear about their fees. Many have hidden fees charged to you through your refund.
Some Tax Preparers are Criminals
Yes, it sounds harsh indeed, but it is a fact. Year after year, thousands of thousands of people are ripped off by tax preparers, many times unregistered and almost untraceable. Here at A&E Acct - Tax Service, we have seen many cases where people have been charged hundreds of dollars without them noticing, let alone agreeing to them. One example is our now happy client Martha Reyes, who was told by a tax preparer she was going to be charged $176 off her refund. She agreed and signed away. When she got her refund later, she was $624 short. Her preprarer had taken out a total of $800 without her permission. But Martha is not alone. There are thousands of cases like hers. We will tell you how to avoid this issues.
Avoid Getting Ripped Off
1. Credentials - Make sure the tax preparer in question is at least registered with the IRS and has a PTIN (Practitioners Tax Identification Number). You may not necessarily need a CPA or Tax Attorney, but if the price is right, then why not. CPAs often have much more experience when compared to tax preparers that only have a PTIN. Any person can acquire a PTIN, but a CPA has a degree in accounting, has passed a really challenging exam, and is required by law to meet a number of continuing education credits every year.
2. History - Look him up online. First check if they have a history of bad reviews on places like Yelp, Consumer Affairs, or BBB (Better Business Bureau). Also, if the tax preparer is a CPA, see if he or she has a clean record on CPAVerify.org. You may also consider Google reviews, but take reviews in general with a grain of salt as these sometime can be fabricated to help or hurt a business. Pay more attention to BBB and CPA Verify.
3. Read & Keep a Copy - This may sound obvious but is often a common mistake. Besides keeping a copy of everything including the detailed fees, you should always go through a tax return to see if you can spot any red flags. You might think that a tax return is hard to understand, but the truth is income taxes are NOT rocket science. You only need to understand one form; the 1040 Form. And you probably don't need to understand the whole thing. Here's a few pointers that will help you be and feel in control.